F-4/A
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As filed with the U.S. Securities and Exchange Commission on November 4, 2021

Registration No. 333-258764

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 3

to

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SATELLOGIC INC.

(Exact name of registrant as specified in its charter)

 

 

 

British Virgin Islands   6770   Not Applicable

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

Ruta 8 Km 17,500, Edificio 300

Oficina 324 Zonamérica

Montevideo, 91600, Uruguay

00-598-25182302

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

 

 

Rick Dunn

Satellogic Inc.

Chief Financial Officer

210 Delburg Street

Davidson, NC 28036

(704) 894-4482

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

 

 

Copies to:

 

Douglas S. Ellenoff, Esq.

Stuart Neuhauser, Esq.

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas

New York, New York 10105-0302

(212) 370-1300

 

Ken Lefkowitz, Esq.

Gary J. Simon, Esq.

Michael Traube, Esq.

Hughes Hubbard & Reed LLP
One Battery Park Plaza

New York, NY 10004

(212) 837-6000

 

Alan Annex, Esq.

Flora R. Perez, Esq.

Greenberg Traurig, P.A.

333 S.E. 2nd Avenue

Miami, FL 33131

(305) 579-0500

 

Gregg S. Lerner, Esq.

Asaf Reindel, Esq.

Friedman Kaplan Seiler & Adelman LLP

7 Times Square

New York, NY 10036

(212) 833-1100

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the Merger Agreement to consummate the proposed merger are satisfied or waived.

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

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

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

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

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer)  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐


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CALCULATION OF REGISTRATION FEE

 

 

Title of each class of

securities to be registered

 

Amount

to be

registered

 

Proposed

maximum

offering price

per share

  Proposed
maximum
aggregate
offering price
 

Amount of

registration fee

Class A ordinary shares, par value $0.0001 per share(1)

  31,850,000   $9.84(2)   $313,404,000   $34,192.38

Class A ordinary shares, par value $0.0001 per share(3)

 

38,182,490

  N/A   $128(4)   $0.02

Class A ordinary shares issuable upon conversion of Class B ordinary shares, par value $0.0001 per share(5)

 

13,826,176

  N/A   $47(6)   $0.01

Warrants being issued in exchange for CF V warrants(7)

  8,533,333   $1.00(8)   $8,533,333   $930.99

Class A ordinary shares issuable upon the exercise of warrants (9)

  8,533,333   $11.50   N/A(10)   N/A

Class A ordinary shares issuable upon the exercise of options (11)

 

7,067,308

  N/A   $23   $0.01

Class A ordinary shares issuable upon the exercise of warrants (12)

 

16,122,031

  N/A   $54(13)   $0.01

Total

              $35,123.39(14)

 

 

(1)

Consists of the sum of (i) 25,600,000 PubCo Class A ordinary shares, par value $0.0001 per share (“PubCo Class A Ordinary Shares”) being issued in exchange for an equal number of shares of Class A common stock, par value $0.0001 per share (“CF V Class A Common Stock”) of CF Acquisition Corp. V (“CF V”), plus (ii) 6,250,000 PubCo Class A Ordinary Shares being issued in exchange for an equal number of shares of CF V Class A Common Stock issued prior to Closing (as defined below) upon conversion of shares of CF V Class B common stock, par value $0.0001 per share (“CF V Class B Common Stock”), in connection with the Business Combination (as defined below), of which a certain number of shares will be subject to forfeiture as described herein.

(2)

Estimated solely for purposes of calculating the registration fee, based on the average of the high and low prices of CF V Class A Common Stock on the Nasdaq Stock Market LLC (“Nasdaq”) on August 6, 2021 ($9.84 per share), such date being within five business days of the date that this registration statement was first filed with the Securities and Exchange Commission (the “SEC”). This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

(3)

Consists of 38,182,490 PubCo Class A Ordinary Shares being issued in exchange for certain outstanding Company Ordinary Shares, Company Preference Shares and upon the Company Notes Conversion (as such terms are defined below), in connection with the Business Combination, of which a certain number of shares will be held in escrow and subject to forfeiture as described herein.

(4)

Pursuant to Rule 457(f)(2) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is an amount equal to $127, calculated as the product of (i) 38,182,490, and (ii) 0.000003333, which is an amount equal to one-third of the par value of the Company Ordinary Shares.

(5)

Consists of 13,826,176 PubCo Class B ordinary shares, par value $0.0001 per share (“PubCo Class B Ordinary Shares”) being issued in exchange for certain outstanding Company Ordinary Shares and Company Preference Shares in connection with the Business Combination, of which a certain number of shares will be held in escrow and subject to forfeiture as described herein. Each PubCo Class B Ordinary Share will be convertible into one (1) PubCo Class A Ordinary Share.

(6)

Pursuant to Rule 457(f)(2) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is an amount equal to $47, calculated as the product of (i) 13,826,176, and (ii) 0.000003333, which is an amount equal to one-third of the par value of the Company Preference Shares.

(7)

Consists of the sum of (i) 8,333,333 PubCo Warrants (as defined below) being issued in exchange for an equal number of CF V Public Warrants (as defined below), and (ii) 200,000 PubCo Warrants being issued in exchange for an equal number of CF V Placement Warrants (as defined below), in connection with the Business Combination.

(8)

Estimated solely for purposes of calculating the registration fee, based on the average of the high and low prices of CF V Warrants on Nasdaq on August 6, 2021 ($1.00 per warrant), such date being within five business days of the date that this registration statement was first filed with the SEC. This calculation is in accordance with Rule 457(f)(1) of the Securities Act.

(9)

Consists of PubCo Class A Ordinary Shares issuable upon the exercise of 8,533,333 PubCo Warrants. Each such PubCo Warrant will entitle the holder to purchase one PubCo Class A Ordinary Share at a price of $11.50 per share (subject to adjustment).

(10)

No separate registration fee required pursuant to Rule 457(g) under the Securities Act.

(11)

Consists of PubCo Class A Ordinary Shares issuable upon exercise of outstanding options of the Company that will become PubCo Options in the Business Combination.

(12)

Consists of 16,122,031 shares issuable upon exercise of a warrant to purchase PubCo Ordinary Shares issuable in connection with the Business Combination in exchange for the Company Warrant (as defined below).

(13)

Pursuant to Rule 457(f)(2) promulgated under the Securities Act and solely for the purpose of calculating the registration fee, the proposed maximum aggregate offering price is an amount equal to $54, calculated as the product of (i) 16,122,031, and (ii) 0.000003333, which is an amount equal to one-third of the par value of the Company Preference Shares issuable upon exercise of the Company Warrant.

(14)

Previously paid.

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the SEC, acting pursuant to Section 8(a), may determine.

 

 

 


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

 

PRELIMINARY PROXY STATEMENT/PROSPECTUS

SUBJECT TO COMPLETION DATED NOVEMBER 4, 2021

LETTER TO STOCKHOLDERS OF CF ACQUISITION CORP. V

CF Acquisition Corp. V

110 East 59th Street

New York, NY 10022

 

 

To the Stockholders of CF Acquisition Corp. V:

You are cordially invited to attend the Special Meeting of Stockholders (the “Special Meeting”) of CF Acquisition Corp. V, which is referred to as “CF V”, on                 at                 , Eastern time, as a virtual meeting. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend, vote your shares and submit questions during the Special Meeting via a live webcast available at     .

At the Special Meeting, our stockholders will be asked to consider and vote upon a proposal, which we refer to as the “Business Combination Proposal,” to approve and adopt the Agreement and Plan of Merger dated July 5, 2021 (as the terms and conditions therein may be amended, supplemented, or otherwise modified from time to time, the “Merger Agreement”), by and among CF V, Nettar Group Inc. (d/b/a Satellogic), a business company with limited liability incorporated under the laws of the British Virgin Islands (the “Company”), Satellogic Inc., a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of the Company (“PubCo”), Ganymede Merger Sub 1 Inc., a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of PubCo (“Target Merger Sub”), and Ganymede Merger Sub 2 Inc., a Delaware corporation and a direct wholly owned subsidiary of PubCo (“SPAC Merger Sub”). The Merger Agreement provides for, among other things, (a) the merger of the Company with and into Target Merger Sub (the “Initial Merger”), upon which the separate existence of Target Merger Sub will cease and the Company will be the Surviving Corporation and a direct wholly owned subsidiary of PubCo, and (b) the merger of CF V with and into SPAC Merger Sub (the “CF V Merger” and together with the Initial Merger, the “Mergers” and the transactions contemplated by the Merger Agreement, including the Mergers, the “Business Combination”), upon which the separate existence of SPAC Merger Sub will cease and CF V will be the surviving corporation and a direct wholly owned subsidiary of PubCo.

As a result of the Mergers, (i) all outstanding shares of capital stock of the Company will be automatically cancelled in exchange for the right to receive PubCo Ordinary Shares determined by reference to the “Company Exchange Ratio” calculated in accordance with the Merger Agreement, which as of September 30, 2021 was 3.34233, (ii) all outstanding options to purchase capital stock of the Company will be converted into options to purchase PubCo Class A Ordinary Shares, (the “Assumed Options”), with the number of shares and price per share thereunder adjusted at the closing of the Business Combination (the “Closing”) based on the Company Exchange Ratio, (iii) the Company Warrant, if outstanding immediately prior to the Closing, will be converted into a warrant to purchase PubCo Class A Ordinary Shares (a “PubCo Warrant”), with the number of shares and price per share thereunder adjusted at the Closing based on the Company Exchange Ratio and calculated in accordance with the terms and conditions of the Company Warrant (the “Assumed Company Warrant”), (iv) each outstanding CF V unit (collectively, the “CF V Units”), comprised of one share of CF V Class A Common Stock and one-third of one warrant to purchase one share of CF V Class A Common Stock (each whole warrant, a “CF V Warrant”), will be automatically detached and the holder thereof will be deemed to hold one share of CF V Class A Common Stock and one-third of one CF V Warrant, (v) each outstanding share of CF V Class B Common Stock will automatically convert into one share of CF V Class A Common Stock, (vi) each outstanding share of CF V Class A Common Stock will be cancelled in exchange for the right to receive PubCo Class A Ordinary Shares on a one-for-one basis (the “CF V Exchange Ratio”), and (vii) each outstanding CF V Warrant will be converted into PubCo Warrants (the “Assumed CF V Warrants” and, together with the Assumed Company Warrant, the “Assumed Warrants”), with the number of shares and price per share thereunder


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adjusted at the Closing based on the CF V Exchange Ratio and calculated in accordance with the terms and conditions of the CF Warrant Agreement.

All Company shareholders, other than Emiliano Kargieman, the Company’s CEO, will receive PubCo Class A Ordinary Shares in the Initial Merger. Mr. Kargieman will receive PubCo Class B Ordinary Shares in the Initial Merger. PubCo Class B Ordinary Shares will rank pari passu with PubCo Class A Ordinary Shares in all respects, provided they will be entitled to super voting rights of ten (10) votes per share as described herein. See “Description of PubCo Securities—PubCo Class B Ordinary Shares.

Upon consummation of the Business Combination, for purposes of the rules of the Trading Market (as defined below), PubCo will be a “controlled company.” Under the Trading Market rules, controlled companies are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group, or another company. Upon completion of the Business Combination, Mr. Kargieman will own approximately 65% of the outstanding voting power for the election of directors (which does not include PubCo Ordinary Shares issuable upon exercise of the Assumed Company Warrant or any Assumed Options). Accordingly, PubCo will be eligible to take advantage of certain exemptions from certain corporate governance standards of the Trading Market.

A portion of the PubCo Ordinary Shares issuable at the Closing to the Sponsor, the Company Shareholders and holders of Convertible Notes (including PubCo Ordinary Shares issuable in connection with the conversion of the Convertible Notes but excluding shares issuable in respect of the Company Series X Preference Shares) will be subject to escrow and potential forfeiture (such shares, the “Aggregate Forfeiture Shares”) if the market price of PubCo Class A Ordinary Shares for the 30-day calendar period ending on the effective date of PubCo’s registration statement on Form F-1 filed after Closing to register the PIPE Shares (as defined below) is below a certain price threshold, and, if any such PubCo Ordinary Shares are forfeited, then the Sponsor and such Company Shareholders and holders of Convertible Notes will have the right to receive an aggregate number of PubCo Ordinary Shares equal to the number of shares that were forfeited if the market price of PubCo Class A Ordinary Shares meets a certain price threshold during the five-year period following the Closing (the “Aggregate Earn-Out Shares”).

In addition, Sponsor subjected 1,869,000 (less 30% of any Aggregate Forfeiture Shares cancelled in accordance with the Merger Agreement) of the PubCo Class A Ordinary Shares it will receive upon conversion of its Founder Shares (the “Sponsor Earn-Out Shares” and together with the Aggregate Earn-Out Shares, the “Earn-Out Shares”) to vesting and potential forfeiture (and related transfer restrictions) after the Closing based on a five year-post-Closing earnout that will be earned based on the price of the PubCo Class A Ordinary Shares following Closing.

In connection with the foregoing and concurrently with the execution of the Merger Agreement, CF V and PubCo entered into separate subscription agreements (the “Subscription Agreements”) with a number of subscribers (each a “PIPE Investor”), including CFAC Holdings V, LLC (the “Sponsor”), pursuant to which the PIPE Investors agreed to purchase, and PubCo agreed to issue and sell to the PIPE Investors, an aggregate of 6,966,770 PubCo Class A Ordinary Shares (as may be adjusted, the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of approximately $69.7 million (the “PIPE Investment”), with the Sponsor’s Subscription Agreement accounting for approximately $23.2 million of the PIPE Investment. During April and May 2021, the Company issued Company Series X Preference Shares in a private placement to certain investors in exchange for an aggregate purchase price of $20,332,300. Contemporaneously with the execution of the Merger Agreement, CF V, PubCo, the Company and holders of the Company Series X Preference Shares (the “Company Series X Shareholders”) entered into a Series X Preference Shareholder Agreement (the “Series X Shareholder Agreement”), pursuant to which, among other things, the Company Series X Shareholders agreed, subject to the occurrence of the Closing, to waive any rights they may have to require the Company to redeem any of their Series X Preference Shares and to allow such shares to convert into PubCo Class A Ordinary Shares in connection with the Closing.


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Contemporaneously with the execution of the Merger Agreement, Sponsor, CF V and PubCo entered into an amendment and restatement of that certain forward purchase contract, dated January 28, 2021, by and between CF V and the Sponsor (the “Amended and Restated Forward Purchase Contract”), pursuant to which the Sponsor agreed to purchase, and PubCo agreed to issue and sell to the Sponsor, 1,250,000 PubCo Class A Ordinary Shares (subject to adjustment as later described), and 333,333 PubCo Warrants.

Pursuant to the Subscription Agreements, Series X Shareholder Agreement and Amended and Restated Forward Purchase Contract, the PIPE Investors, the Company Series X Shareholders and the Sponsor may be entitled to receive additional PubCo Ordinary Shares based on the stock price of PubCo Class A Ordinary Shares following the Closing.

In addition, PIPE Investors that elected to subject any PubCo Class A Ordinary Shares they purchase pursuant to their Subscription Agreement to a lockup commencing on the Closing and expiring on the second anniversary thereof will receive, at Closing, a number of non-redeemable warrants (the “PIPE Warrants”) to acquire PubCo Class A Ordinary Shares at a purchase price of $20.00 per share equal to the number of PIPE Shares that they elected to subject to such lock-up.

It is anticipated that upon Closing, (i) existing CF V Stockholders (other than the Sponsor Related Parties) will own approximately 22.1% of the outstanding PubCo Ordinary Shares, (ii) the Company’s existing securityholders (including the holders of the Company Series X Preference Shares and the Convertible Notes) will own approximately 66.3% of the outstanding PubCo Ordinary Shares, (iii) the Sponsor Related Parties, through their ownership of CF V Common Stock on the date hereof and through the Sponsor’s participation in the PIPE Investment and the Amended and Restated Forward Purchase Contract, will own approximately 7.5% of the outstanding PubCo Ordinary Shares, and (iv) the PIPE Investors (other than the Sponsor), through their participation in the PIPE Investment, will own approximately 4.1% of the outstanding PubCo Ordinary Shares.

The ownership percentages with respect to PubCo following the Business Combination are based upon the number of Company Shares and shares of CF V Common Stock issued and outstanding as of September 30, 2021 and are subject to a number of assumptions. These relative percentages assume (i) all holders of Convertible Notes convert their Convertible Notes into Company Shares at Closing, (ii) all holders of Company Series X Preference Shares convert their Company Series X Preference Shares into PubCo Class A Ordinary Shares in accordance with the Series X Shareholder Agreement, (iii) all Company Options are exercised prior to Closing, (iv) the Company Warrant is exercised prior to Closing, (v) no Aggregate Forfeiture Shares will be forfeited by the Sponsor, the Company Shareholders or holders of Convertible Notes and no Additional Shares will be issued pursuant to the PIPE Subscription Agreements, the Series X Shareholder Agreement, or the Amended and Restated Forward Purchase Contract, (vi) none of the Sponsor Earn-Out Shares vest, (vii) no exercise of CF V Warrants or PIPE Warrants, (viii) no Company Shareholder exercises its rights of appraisal, and (ix) no CF V Stockholders exercise redemption rights in connection with their CF V Public Shares. If any redemption rights are exercised in respect of CF V Public Shares, or any of the other assumptions are not correct, these percentages will be different.

The Board of Directors of CF V (the “CF V Board”) has fixed the close of business on                , 2021 as the record date (the “Record Date”) for the determination of stockholders entitled to notice of, and to vote at, the Special Meeting or any postponement or adjournment thereof. Stockholders should carefully read the accompanying Notice of Special Meeting and proxy statement/prospectus for a more complete statement of the Proposals to be considered at the Special Meeting.

At the Special Meeting, the CF V Stockholders will also be asked to consider and vote to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary (the “Adjournment Proposal” together with the Business Combination Proposal, the “Proposals”).


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The CF V Board has unanimously approved and adopted the Merger Agreement and unanimously recommends that the CF V stockholders vote “FOR” each of the Proposals presented to CF V stockholders at the Special Meeting. When you consider the CF V Board’s recommendation of these Proposals, you should keep in mind that the directors and officers of CF V have interests in the Business Combination that may conflict with your interests as a stockholder. See the section titled “The Business Combination Proposal—Interests of the Sponsor and CF V’s Directors, Officers and Affiliates in the Business Combination” in this proxy statement/prospectus.

Pursuant to the CF V Charter, CF V public stockholders have redemption rights in connection with the Business Combination. CF V public stockholders are not required to affirmatively vote for or against the Business Combination in order to redeem their CF V Public Shares for cash. This means that CF V public stockholders who hold shares of CF V Class A Common Stock on or before              (two (2) business days before the Special Meeting) will be eligible to elect to have their shares of CF V Class A Common Stock redeemed for cash in connection with the Special Meeting, whether or not they are holders as of the Record Date, and whether or not such shares are voted at the Special Meeting.

By Order of the CF V Board,

Sincerely,

Howard W. Lutnick

Chief Executive Officer and Chairman

                , 2021

This proxy statement/prospectus is dated                 , 2021 and is first being mailed to CF V stockholders on or about                 , 2021.

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


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CF Acquisition Corp. V

110 East 59th Street

New York, NY 10022

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS OF CF ACQUISITION CORP. V

TO BE HELD ON                 , 2021

TO THE STOCKHOLDERS OF CF ACQUISITION CORP. V:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “Special Meeting”) of CF Acquisition Corp. V, a Delaware corporation, which is referred to as “CF V”, will be held at                Eastern Time, on             , as a virtual meeting. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend, vote your shares and submit questions during the Special Meeting via a live webcast available at              . At the Special Meeting, CF V stockholders will be asked to consider and vote upon the following proposals.

(1) to adopt and approve the Agreement and Plan of Merger, dated July 5, 2021 (as the terms and conditions therein may be amended, modified or waived from time to time, the “Merger Agreement”), by and among, CF V, Satellogic Inc., a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of the Company (“PubCo”), Nettar Group Inc. (d/b/a Satellogic), a business company with limited liability incorporated under the laws of the British Virgin Islands (the “Company”), Ganymede Merger Sub 1 Inc., a business company with limited liability incorporated under the laws of the British Virgin Islands and a direct wholly owned subsidiary of PubCo (“Target Merger Sub”), and Ganymede Merger Sub 2 Inc., a Delaware corporation and a direct wholly owned subsidiary of PubCo (“SPAC Merger Sub”), and to approve the transactions contemplated thereby (the “Business Combination”); and

(2) to approve a proposal to adjourn the Special Meeting to a later date or dates, if necessary.

Only holders of record of CF V Common Stock at the close of business on                , 2021 (the “Record Date”) are entitled to notice of the Special Meeting and to vote at the Special Meeting and any adjournments or postponements of the Special Meeting. Please note that you will not be able to attend the Special Meeting in person. In light of the ongoing developments relating to the ongoing COVID-19 pandemic and to protect the health of CF V stockholders, management, employees and the community, the Special Meeting will be held virtually conducted via live audio webcast. You will be able to attend the Special Meeting by visiting             . CF V recommends that you log in at least 15 minutes before the Special Meeting to ensure you are logged in when the meeting starts.

Pursuant to the CF V Charter, CF V is providing its public stockholders with the opportunity to redeem, upon the Closing, shares of CF V Class A Common Stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two (2) business days prior to the Closing) in the Trust Account that holds the proceeds (including interest but less taxes payable) of the IPO. For illustrative purposes, based on funds in the Trust Account of $250.0 million on September 30, 2021, the estimated per share redemption price would have been approximately $10.00. CF V public stockholders are not required to affirmatively vote for or against the Business Combination in order to redeem their shares of CF V Class A Common Stock for cash. This means that public stockholders who hold shares of CF V Class A Common Stock on or before                 , (two (2) business days before the Special Meeting) will be eligible to elect to have their shares of CF V Class A Common Stock redeemed for cash in connection with the Special Meeting, whether or not they are holders as of the Record Date, and whether or not such shares are voted at the Special Meeting. A CF V public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, with respect to 15% or more of the shares of CF V Class A Common Stock included in the CF V Units sold in the IPO. Holders of our outstanding CF V Warrants and CF V Units do not have redemption rights with respect


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to such securities in connection with the Business Combination. Holders of outstanding CF V Units must separate the underlying CF V Public Shares and CF V Public Warrants prior to exercising redemption rights with respect to the CF V Public Shares. The Sponsor and CF V’s officers and directors have agreed to waive their redemption rights with respect to any shares of CF V Common Stock they may hold in connection with the consummation of the Business Combination, and such shares will be excluded from the pro rata calculation used to determine the per-share redemption price. Currently, the Sponsor owns 21.4% of the issued and outstanding shares of CF V Common Stock. The Sponsor and CF V’s directors and officers have agreed to vote any shares of CF V Common Stock owned by them in favor of the Business Combination Proposal.

The approval of the Business Combination Proposal requires the affirmative vote of a majority of the issued and outstanding shares of CF V Common Stock as of the Record Date for the Special Meeting. The CF V Board has already approved the Business Combination.

As of September 30, 2021, there was $250.0 million in the Trust Account. Each redemption of shares of CF V Class A Common Stock by CF V’s public stockholders will decrease the amount in the Trust Account. Net tangible assets will be maintained at a minimum of $5,000,001 immediately prior to or upon consummation of the Business Combination.

Your attention is directed to the proxy statement/prospectus accompanying this notice (including the annexes thereto) for a more complete description of the proposed Business Combination and related transactions and each of the Proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call                      at                .

 

By Order of the CF V Board,

 

     

Howard W. Lutnick
Chief Executive Officer and Chairman


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     Page  

ABOUT THIS PROXY STATEMENT/PROSPECTUS

     1  

MARKET AND INDUSTRY DATA

     1  

FINANCIAL STATEMENT PRESENTATION

     2  

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     2  

FREQUENTLY USED TERMS

     3  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     12  

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

     15  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     31  

SUMMARY RISK FACTORS

     53  

SELECTED HISTORICAL FINANCIAL INFORMATION AND OPERATING DATA OF THE COMPANY

     55  

SELECTED HISTORICAL FINANCIAL INFORMATION OF CF V

     56  

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     59  

COMPARATIVE PER SHARE INFORMATION

     61  

RISK FACTORS

     63  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     122  

UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF DECEMBER 31, 2020

     126  

UNAUDITED PRO FORMA COMBINED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED DECEMBER 31, 2020

     131  

SPECIAL MEETING OF CF V STOCKHOLDERS

     133  

THE BUSINESS COMBINATION PROPOSAL

     140  

THE ADJOURNMENT PROPOSAL

     182  

INFORMATION ABOUT CF V

     183  

CF V’S MANAGEMENT

     190  

INFORMATION RELATED TO PUBCO

     197  

INFORMATION RELATED TO THE COMPANY

     198  

CF V’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

     212  

THE COMPANY’S DIRECTORS AND SENIOR MANAGEMENT

     217  

THE COMPANY’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

     219  

MANAGEMENT OF PUBCO FOLLOWING THE BUSINESS COMBINATION

     234  

BENEFICIAL OWNERSHIP OF SECURITIES

     239  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     244  

MATERIAL TAX CONSIDERATIONS

     249  

DESCRIPTION OF PUBCO SECURITIES

     269  

COMPARISON OF CORPORATE GOVERNANCE AND SHAREHOLDER RIGHTS

     273  

SHARES ELIGIBLE FOR FUTURE SALE

     289  

STOCK MARKET AND DIVIDEND INFORMATION

     292  

ANNUAL MEETING SHAREHOLDER PROPOSALS

     292  

PUBCO LEGAL MATTERS

     292  

EXPERTS

     293  

TRANSFER AGENT AND REGISTRAR

     293  

SUBMISSION OF STOCKHOLDER PROPOSALS

     293  

STOCKHOLDER COMMUNICATIONS

     293  

WHERE YOU CAN FIND MORE INFORMATION

     293  

INDEX OF FINANCIAL STATEMENTS

     F-1  

 

ANNEXES

Annex A: Merger Agreement
Annex B: Form of Memorandum and Articles of Association of PubCo
Annex C: Form of Proxy Card


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ABOUT THIS PROXY STATEMENT/PROSPECTUS

This document, which forms part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission, or the “SEC,” by Satellogic Inc., constitutes a prospectus of PubCo under Section 5 of the U.S. Securities Act of 1933, as amended, or the “Securities Act,” with respect to the PubCo Ordinary Shares to be issued to CF V Stockholders, the PubCo Warrants to be issued to CF V Warrant holders, the PubCo Ordinary Shares underlying such warrants and the conversion of PubCo Class B Ordinary Shares to PubCo Class A Ordinary Shares, if the Business Combination described herein is consummated. This document also constitutes a notice of meeting and a proxy statement under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended, or the “Exchange Act”, with respect to the Special Meeting of CF V Stockholders at which CF V Stockholders shall be asked to consider and vote upon a proposal to approve the Business Combination by the adoption of the Merger Agreement, among other matters, and to adjourn the meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes to adopt the Business Combination Proposal.

References to “U.S. Dollars” and “$” in this proxy statement/prospectus are to United States dollars, the legal currency of the United States. Discrepancies in any table between totals and sums of the amounts listed are due to rounding. Certain amounts and percentages have been rounded; consequently, certain figures may add up to be more or less than the total amount and certain percentages may add up to be more or less than 100% due to rounding. In particular and without limitation, amounts expressed in millions contained in this proxy statement/prospectus have been rounded to a single decimal place for the convenience of readers.

MARKET AND INDUSTRY DATA

This proxy statement/prospectus contains estimates, projections, and other information concerning the Company’s industry and business, as well as data regarding market research, estimates, and forecasts prepared by the Company’s management. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. The industry in which the Company operates is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” Unless otherwise expressly stated, the Company obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry and general publications, government data, and similar sources. In some cases, the Company does not expressly refer to the sources from which this data is derived. In that regard, when the Company refers to one or more sources of this type of data in any paragraph, you should assume that other data of this type appearing in the same paragraph is derived from sources which the Company paid for, sponsored, or conducted, unless otherwise expressly stated or the context otherwise requires. Forecasts and other forward-looking information with respect to industry, business, market, and other data are subject to the same qualifications and additional uncertainties regarding the other forward-looking statements in this proxy statement/prospectus. See “Cautionary Note Regarding Forward-Looking Statements.”

 

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FINANCIAL STATEMENT PRESENTATION

CF V

The historical financial statements of CF V were prepared in accordance with U.S. GAAP and are denominated in U.S. Dollars.

The Company

The Company’s audited consolidated financial statements as of and for the years ended December 31, 2020 and 2019 included in this proxy statement/prospectus have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and are denominated in U.S. Dollars.

The Company refers in various places in this proxy statement/prospectus to non-IFRS financial measures, including Adjusted EBITDA, which are more fully explained in “Selected Historical Financial Information And Operating Data Of The Company”. The presentation of non-IFRS information is not meant to be considered in isolation or as a substitute for the Company’s audited consolidated financial results prepared in accordance with IFRS.

PubCo

PubCo was incorporated on June 29, 2021 for the sole purpose of effectuating the transactions described herein. PubCo has no material assets and does not operate any businesses. Accordingly, no financial statements of PubCo have been included in this proxy statement/prospectus.

The Business Combination is made up of the series of transactions provided for in the Merger Agreement as described elsewhere within this proxy statement/prospectus. The transactions will be accounted for as a capital reorganization under IFRS.

Following the Business Combination, PubCo will qualify as a foreign private issuer and will prepare its financial statements in accordance with IFRS and will be denominated in U.S. Dollars.

Accordingly, the unaudited pro forma condensed combined financial information and the comparative per share information that will be presented in this proxy statement/prospectus will be prepared in accordance with IFRS and will be denominated in U.S. Dollars.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

The Company name, logos and other trademarks and service marks of the Company appearing in this proxy statement/prospectus are the property of the Company. Solely for convenience, some of the trademarks, service marks, logos and trade names referred to in this proxy statement/prospectus are presented without the ® and  symbols, but such references are not intended to indicate, in any way, that the Company will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensors to these trademarks, service marks and trade names. This proxy statement/prospectus contains additional trademarks, service marks and trade names of others. All trademarks, service marks and trade names appearing in this proxy statement/prospectus are, to our knowledge, the property of their respective owners. We do not intend our use or display of other companies’ trademarks, service marks, copyrights or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

 

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FREQUENTLY USED TERMS

In this document:

2018 NPA” means the Note Purchase Agreement dated as of April 6, 2018, as amended and restated in the 2019 NPA.

2019 NPA” means the Amended and Restated Note Purchase Agreement dated as of September 9, 2019, as amended from time to time.

2020 NPA” means the Note Purchase Agreement dated as of September 25, 2020, as amended from time to time.

Acquisition Entities” means, collectively, PubCo, Target Merger Sub and SPAC Merger Sub, and each, individually, an “Acquisition Entity”.

Action” means any action, lawsuit, complaint, claim, petition, suit, audit, examination, assessment, arbitration, mediation or inquiry, or any proceeding or investigation, by or before any governmental authority.

Acquisition Proposal” means, as to the Company or CF V, other than the Transactions and other than the acquisition or disposition of equipment or other tangible personal property in the ordinary course of business, any offer or proposal relating to: (a) any acquisition or purchase, direct or indirect, of (i) 15% or more of the consolidated assets of such Person and its subsidiaries or (ii) 15% or more of any class of equity or voting securities (for the avoidance of doubt, excluding a sale of warrant(s) issued by the Company prior to the date of the Merger Agreement by a warrant holder) of (x) such Person or (y) one or more subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its subsidiaries; (b) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in any Person beneficially owning 15% or more of any class of equity or voting securities of (i) such Person or (ii) one or more subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its subsidiaries; or (c) a merger, consolidation, share exchange, business combination, sale of substantially all the assets, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving (i) such Person or (ii) one or more subsidiaries of such Person holding assets constituting, individually or in the aggregate, 15% or more of the consolidated assets of such Person and its subsidiaries.

Additional Shares” means the Series X Additional Shares, the PIPE Additional Shares and the FPC Additional Shares, collectively.

Adjournment Proposal” means the proposal to be considered at the Special Meeting to adjourn the Special Meeting to a later date or dates, if necessary to permit further solicitation and vote of proxies if it is determined by CF V that more time is necessary or appropriate to approve one or more proposals at the Special Meeting.

Adjustment Period” means the 30-calendar day period ending on (and including) the date that the registration statement registering the PubCo Class A Ordinary Shares to be issued to the PIPE Investors pursuant to the PIPE Subscription Agreements is declared effective.

Adjustment Period VWAP” means the volume weighted average price of a PubCo Class A Ordinary Share, as reported on the Trading Market, determined for the Trading Days that occur during the Adjustment Period (as reported on Bloomberg).

Aggregate Base Shares” means the aggregate amount of PubCo Class A Ordinary Shares to be issued to (a) the PIPE Investors pursuant to the PIPE Subscription Agreements, (b) Sponsor pursuant to the Amended and Restated Forward Purchase Contract and (c) the holders of Company Series X Preference Shares in respect thereof in accordance with Section 2.2(g)(i) of the Merger Agreement.

 

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Aggregate Exercise Price” means the sum of the exercise prices of all Company Options immediately prior to the Closing.

Agreement End Date” means February 28, 2022.

Ancillary Agreements” means, collectively, (i) the Shareholder Support Agreement, (ii) the Sponsor Support Agreement, (iii) the Lock-Up Agreements, (iv) the PIPE Subscription Agreements; (v) the Amended and Restated Forward Purchase Contract; (vi) the Series X Shareholder Agreement; and (vii) the PubCo Governing Documents.

Applicable NPA Amount” means (i) with respect to Convertible Notes issued under the 2018 NPA, $200,000,000, (ii) with respect to Convertible Notes issued under the 2019 NPA, $220,000,000, and (iii) with respect to Convertible Notes issued under the 2020 NPA, $250,000,000.

Assumed Options” means Company Options that will be assumed by PubCo upon consummation of the Business Combination and converted into options to purchase PubCo Class A Ordinary Shares.

Available Cash” means the amount of cash available to CF V as of the Closing, including (i) the amount from the PIPE Investment and the Forward Purchase Amount to be funded into PubCo, plus the $20,332,300 amount funded into the Company in connection with the issuance of the Company Series X Preference Shares prior to entrance into the Merger Agreement, (ii) the amount of cash available in the Trust Account after deducting the amount required to satisfy the CF V Share Redemption Amount, and (iii) other amounts available to CF V as of the Closing.

Business Combination” means the Mergers and the other Transactions to be consummated under the Merger Agreement.

Business Combination Proposal” means the proposal to approve the adoption of the Merger Agreement and the Business Combination.

BVI” means the British Virgin Islands.

BVI Act” means the BVI Business Companies Act, 2004, as amended.

Cantor” means Cantor Fitzgerald L.P., a Delaware limited partnership and an affiliate of the Sponsor, CF&Co. and, prior to the consummation of the Business Combination, CF V.

CF&Co.” means Cantor Fitzgerald & Co., a New York general partnership.

CF V” means CF Acquisition Corp. V, a Delaware corporation.

CF V Board” means the board of directors of CF V.

CF V Bylaws” means the bylaws of CF V in effect immediately prior to the CF V Merger Effective Time, as amended and/or restated from time to time.

CF V Capital Stock” means, collectively, the CF V Common Stock and the preferred stock of CF V, par value $0.0001 per share.

CF V Charter” means the Amended and Restated Certificate of Incorporation of CF V, dated January 28, 2021, as amended and/or restated from time to time.

CF V Class A Common Stock” means Class A common stock of CF V, par value $0.0001 per share.

 

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CF V Class B Common Stock” means Class B common stock of CF V, par value $0.0001 per share.

CF V Common Stock” means, collectively, the CF V Class A Common Stock and the CF V Class B Common Stock.

CF V Exchange Ratio” means the exchange of CF V Common Stock for PubCo Class A Ordinary Shares on a one-for-one basis.

CF V Governing Documents” means, collectively, the CF V Charter and the CF V Bylaws.

CF V Merger” means the merger of SPAC Merger Sub with and into CF V.

CF V Merger Effective Time” means the date and time that the CF V Merger becomes effective in accordance with the Merger Agreement.

CF V Placement Shares” means the shares of CF V Class A Common Stock underlying the CF V Placement Units.

CF V Placement Units” means the CF V Units issued to the Sponsor in the CF V Private Placement.

CF V Placement Warrants” means the CF V Warrants underlying the CF V Placement Units.

CF V Private Placement” means the private placement that closed concurrently with the closing of the IPO pursuant to which CF V issued and sold to the Sponsor 600,000 CF V Placement Units as a price of $10.00 per CF V Placement Unit, generating gross proceeds of $6,000,000.

CF V Public Shares” means the shares of CF V Class A Common Stock sold as part of the CF V Units in the IPO.

CF V Public Warrants” means the CF V Warrants sold as part of the CF V Units in the IPO.

CF V Share Redemption” means the election by an eligible (as determined in accordance with the CF V Governing Documents) holder of shares of CF V Common Stock to redeem all or a portion of the shares of CF V Common Stock held by such holder at a per-share price, payable in cash, equal to a pro rata share of the aggregate amount on deposit in the Trust Account (including any interest earned on the funds held in the Trust Account, but net of taxes payable and up to $100,000 to pay dissolution expenses) (as determined in accordance with the CF V Governing Documents) in connection with the Proposals.

CF V Share Redemption Amount” means the aggregate amount payable from the Trust Account with respect to all CF V Share Redemptions.

CF V Stockholder” means any holder of any shares of CF V Capital Stock.

CF V Stockholders’ Approval” means the approval of the Proposals, in each case, by an affirmative vote of the holders of at least a majority of the outstanding shares of CF V Common Stock entitled to vote, who attend and vote thereupon (as determined in accordance with the CF V Governing Documents) at a CF V Stockholder Meeting duly called by the CF V Board and held for such purpose.

CF V Transaction Expenses” means any out-of-pocket fees and expenses paid or payable by CF V or Sponsor (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the Transactions, including (A) all fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers, (B) transfer taxes, and (C) filing fees paid to governmental authorities in connection with the Transactions in accordance with the Merger Agreement.

 

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CF V Units” means units of CF V, each unit comprising one share of CF V Class A Common Stock and one-third of one CF V Warrant.

CF V Warrant Agreement” means that certain Warrant Agreement, dated January 28, 2021, by and between CF V and Continental Stock Transfer & Trust Company, as the warrant agent.

CF V Warrants” means warrants to purchase shares of CF V Class A Common Stock including the CF V Public Warrants and the CF V Placement Warrants.

Closing” means the closing of the Business Combination.

Closing Date” means the date on which the Business Combination is consummated.

Code” means the Internal Revenue Code of 1986, as amended.

Columbia Loan” means the Loan and Security Agreement dated March 8, 2021, by and between Columbia River Investment Limited, a BVI company, and the Company.

Company Articles” means the Amended and Restated Articles of Association of the Company dated April 23, 2021.

Company Board” means the board of directors of the Company.

Company Disclosure Letter” means the disclosure letter to the Company which forms part of the Merger Agreement.

Company ESOP” means the Nettar Group Inc. 2015 Share Plan, as amended.

Company Exchange Ratio” means the quotient obtained by dividing the Price per Company Share by $10.00 (ten dollars).

Company Governing Documents” means, collectively, the Company Memorandum and the Company Articles.

Company Memorandum” means the Amended and Restated Memorandum of Association of the Company dated April 23, 2021.

Company Options” means any options granted or approved by the Company Board for grant but not yet granted, under the Company ESOP to purchase Company Ordinary Shares.

Company Ordinary Shares” means the ordinary shares of the Company, par value $0.00001 per share, as defined in the Company Memorandum.

Company Preference Shares” means, collectively, Company Series A Preference Shares, Company Series B Preference Shares, Company Series B-1 Preference Shares and Company Series X Preference Shares.

Company Series A Preference Shares” means the series A preference shares of the Company, par value $0.00001 per share, as defined in the Company Memorandum.

Company Series B Preference Shares” means the series B preference shares of the Company, par value $0.00001 per share, as defined in the Company Memorandum.

 

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Company Series B-1 Preference Shares” means the series B-1 preference shares of the Company, par value $0.00001 per share, as defined in the Company Memorandum.

Company Series X Preference Shares” means the series X preference shares of the Company, par value $0.00001 per share, as defined in the Company Memorandum.

Company Shareholder” means any holder of any Company Shares.

Company Shares” means, collectively, Company Ordinary Shares and Company Preference Shares.

Company Transaction Expenses” means any out-of-pocket fees and expenses payable by any of the Nettar Companies or their respective affiliates (whether or not billed or accrued for) as a result of or in connection with the negotiation, documentation and consummation of the Transactions, including (i) all fees, costs, expenses, brokerage fees, commissions, finders’ fees and disbursements of financial advisors, investment banks, data room administrators, attorneys, accountants and other advisors and service providers; (ii) any change in control bonus, transaction bonus, retention bonus, termination or severance payment or payment relating to terminated options, warrants or other equity appreciation, phantom equity, profit participation or similar rights, in any case, to be made to any current or former employee, independent contractor, director or officer of any of the Nettar Companies at or after the Closing pursuant to any agreement to which any of the Nettar Companies is a party prior to the Closing which become payable (including if subject to continued employment) as a result of the execution of the Merger Agreement or the consummation of the Transactions; and (iii) filing fees paid to governmental authorities in connection with the Transactions in accordance with the Merger Agreement.

Company Warrant” means the outstanding and unexercised warrant to purchase Company Shares pursuant to that certain Warrant to Purchase Shares, dated as of March 8, 2021, by and between the Company and Columbia River Investment Limited.

Consent Solicitation Statement” means the consent solicitation statement with respect to the solicitation by the Company of the Company Written Consent.

Convertible Notes” means the convertible notes the Company issued pursuant to the 2018 NPA, the 2019 NPA and 2020 NPA.

Convertible Notes Conversion” means the conversion of the Convertible Notes into Company Preference Shares immediately prior to the Initial Merger Effective Time in accordance with the Merger Agreement, the Convertible Notes, the Stockholder Support Agreement and the Company Governing Documents.

DGCL” means the General Corporation Law of the State of Delaware.

Dissenting Company Shares” means Company Shares that are outstanding immediately prior to the Initial Merger Effective Time and that are held by Company Shareholders who have not voted in favor of the Initial Merger nor consented thereto in writing and who have given a notice of election to dissent pursuant to section 179 of the BVI Act and otherwise complied with all of the provisions of the BVI Act relevant to the exercise and perfection of dissenters’ rights.

Effectiveness Date” means the date on which the registration statement registering the resale of the PIPE Shares issued pursuant to the PIPE Subscription Agreements is declared effective by the SEC.

Eligible PIPE Investor” means any PIPE Investor who is not a beneficial or record owner of the Company’s equity or an affiliate of CF V prior to the Closing (including the Sponsor) and also excluding any PIPE Investor who elects to receive warrants pursuant to the Lock-Up Addendum.

 

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Equity Incentive Plan” means the equity incentive plan that the Acquisition Entities agreed that, prior to the Closing Date, and subject to the approval of PubCo’s shareholders, the PubCo Board will approve and adopt in a form consistent with the form of equity plan customary for publicly traded companies, with an initial award pool of PubCo Class A Ordinary Shares equal to no more than ten percent (10%) of the PubCo Ordinary Shares outstanding as of immediately after the CF V Merger Effective Time (rounded up to the nearest whole share), without an “evergreen” provision, and with other terms to be mutually agreed between the Company and CF V.

Escrow Agent” means PubCo’s transfer agent (or, if such Person shall not agree to serve as escrow agent, such other bank or trust company as shall be appointed by PubCo and reasonably satisfactory to PubCo and CF V).

Forward Purchase Amount” means the aggregate amount of $10,000,000 for which Sponsor committed to purchase the Forward Purchase Securities at the Closing.

Forward Purchase Securities” means 1,250,000 PubCo Class A Ordinary Shares and 333,333 PubCo Warrants.

Founder Shares” means 6,250,000 shares of CF V Class B Common Stock owned by Sponsor and the independent directors of CF V (including any shares of CF V Class A Common Stock issued upon conversion of such shares of CF V Class B Common Stock and the PubCo Class A Ordinary Shares issued in exchange thereof pursuant to the CF V Merger).

FPC Additional Shares” means the PubCo Class A Ordinary Shares the Sponsor will be entitled to receive if the Adjustment Period VWAP is less than $10.00 per PubCo Class A Ordinary Share. In the event the Adjustment Period VWAP is less than $8.00, the Adjustment Period VWAP for purposes of this calculation will be deemed to be $8.00.

Fully-Diluted Company Shares” means the total number of issued and outstanding Company Ordinary Shares as of immediately prior to the Initial Merger Effective Time, determined on a fully-diluted basis (a) assuming exercise of all Company Options, (b) assuming exercise of the Company Warrant, (c) treating Company Preference Shares on an as-converted to Company Ordinary Shares basis (but excluding the Company Series X Preference Shares issued prior to the date of the Merger Agreement), and (d) assuming the conversion of all Convertible Notes on an as-converted to Company Ordinary Shares basis.

GAAP” means accounting principles generally accepted in the United States of America.

IFRS” means the International Financial Reporting Standards.

Initial Merger” means the merger of the Company with and into Target Merger Sub.

Initial Merger Effective Time” means the date and time that the Initial Merger becomes effective in accordance with the Merger Agreement.

Insider Letter” means the letter agreement, dated as of January 28, 2021, as amended as of the date of the Merger Agreement, by and among CF V, Sponsor and certain Insiders, pursuant to which Sponsor and the Insiders agreed to certain voting requirements, transfer restrictions and waiver of redemption rights with respect to the CF V securities (and as of the Closing, PubCo securities) owned by them.

Insiders” means the officers and directors of CF V.

IPO” means CF V’s initial public offering of CF V Units, consummated on February 2, 2021.

 

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Key Company Shareholders” means certain holders of Company Ordinary Shares, Company Preference Shares and/or Convertible Notes specified in the Company Disclosure Letter.

Lock-Up Addendum” means the addendum to the PIPE Subscription Agreement which, if executed by a PIPE Investor, (i) subjects the PIPE Investor to a lock-up period of two years from the Closing with respect to the PubCo Class A Ordinary Shares held by such PIPE Investor and subjected to such lock-up and (ii) entitles the PIPE Investor to be issued that number of PIPE Warrants equal to the number of PIPE Shares subjected to such lock-up.

Lock-Up Agreements” means the separate lock-up agreements entered into concurrently with the execution of the Merger Agreement among CF V, PubCo and a number of Company Shareholders and holders of Convertible Notes, pursuant to which the PubCo Ordinary Shares received by such Company Shareholders and holders of Convertible Notes will be locked-up and subject to transfer restrictions for a period of time following the Closing.

Lock-Up Company Securityholder” means a Company Shareholder and/or holder of Convertible Notes that is subject to a Lock-Up Agreement upon the Closing.

Lock-Up PIPE Investor” means the PIPE Investor that elected to be subject to the Lock-Up Addendum upon the Closing.

Lock-Up Securities” means the PubCo Ordinary Shares and/or Assumed Options to be received by a Lock-Up Company Securityholder that are subject to the Lock-Up Agreement upon consummation of the Business Combination, including any PubCo Ordinary Shares underlying the Assumed Options held by such Lock-Up Company Securityholder, and further including any other securities held by such Lock-Up Company Securityholder immediately following the Business Combination which are convertible into, or exercisable, or exchangeable for, PubCo Ordinary Shares (together with any securities paid as dividends or distributions with respect to such securities or into which such securities are exchanged or converted, but not including any shares issued in connection with the PIPE Subscription Agreements or shares issued in connection with the conversion of Series X Preference Shares).

Merger Consideration” means the sum of (a) $721,705,487 minus (b) the amount of interest accrued under the Columbia Loan from July 2, 2021 until the Closing Date, minus (c) the amount of cumulative dividends accrued in accordance with the Company Articles on the Company Series X Preference Shares from July 2, 2021 until the Closing Date, plus (d) the Aggregate Exercise Price.

Merger Consideration Shares” means the PubCo Class B Ordinary Shares (in the case of the Company’s Chief Executive Officer) or PubCo Class A Ordinary Shares (in all other cases) that is equal to the Company Exchange Ratio and as calculated in accordance with the Merger Agreement issued in exchange for each Company Ordinary Share and Company Preference Share that is issued and outstanding immediately prior to the Initial Merger Effective Time (other than (i) any Company Series X Preference Shares the holder of which has elected to exercise its redemption rights, (ii) any treasury shares or share held by the Company or any of its affiliates, and (iii) any Dissenting Company Shares).

Minimum Cash Amount” means an amount of Available Cash equal to $225,000,000, without regard to any loans made by the Sponsor or its affiliates to CF V and any CF V Transaction Expenses to be reimbursed or paid in accordance with the Merger Agreement.

Nasdaq” means The Nasdaq Stock Market LLC.

NDA” means the letter agreement, dated as of January 29, 2021, between CF V and the Company.

 

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Nettar Companies” means, collectively, the Company and its subsidiaries (but not, for the avoidance of doubt, PubCo).

NYSE” means the New York Stock Exchange.

Payment Spreadsheet” means a spreadsheet that shall be delivered by the Company to CF V pursuant to Section 2.1(c) of the Merger Agreement at least two (2) Business Days prior to the Closing, which shall set forth, (a) the portion of the Merger Consideration Shares payable to the Company Shareholders (including the allocation of PubCo Class A Ordinary Shares and PubCo Class B Ordinary Shares, as applicable) and (y) the Assumed Options, in each case, in accordance with the terms of the Merger Agreement and the Company Governing Documents.

Person” means any individual, firm, corporation, partnership, limited liability company, incorporated or unincorporated association, trust, estate, joint venture, joint stock company, governmental authority or instrumentality or other entity of any kind.

PIPE Additional Shares” means the PubCo Class A Ordinary Shares each PIPE Investor will be entitled to receive if the Adjustment Period VWAP is less than $10.00 per PubCo Class A Ordinary Share. In the event the Adjustment Period VWAP is less than $8.00, the Adjustment Period VWAP for purposes of this calculation will be deemed to be $8.00.

PIPE Investment Amount” means $69,667,700.

PIPE Investment” means the sale of PubCo Class A Ordinary Shares pursuant to PIPE Subscription Agreements in a private placement to occur concurrently with the Business Combination.

PIPE Investors” means investors that subscribed for PubCo Class A Ordinary Shares in the PIPE Investment.

PIPE Shares” means such number of PubCo Class A Ordinary Shares which a PIPE Investor agreed to purchase from PubCo as set forth in such PIPE Investor’s PIPE Subscription Agreement.

PIPE Subscription Agreements” mean the Subscription Agreements, dated as of July 5, 2021, by and among CF V, PubCo and the PIPE Investors.

PIPE Warrants” means the warrants to acquire 2,500,000 PubCo Class A Ordinary Shares at a purchase price of $20.00 per share to be issued pursuant to the Lock-Up Addendum, which number of warrants is equal to the 2,500,000 PIPE Shares that the Lock-Up PIPE Investor elected to subject to lock-up pursuant to the Lock-Up Addendum.

Price per Company Share” means the quotient, expressed as a dollar number, obtained by dividing the Merger Consideration by the Fully-Diluted Company Shares.

Proposals” means the Business Combination Proposal and the Adjournment Proposal.

PubCo Board” means the board of directors of PubCo.

PubCo Class A Ordinary Shares” means the class A ordinary shares of PubCo, par value $0.0001 per share.

PubCo Class B Ordinary Shares” means the class B ordinary shares of PubCo, par value $0.0001 per share.

 

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PubCo Governing Documents” means the Amended and Restated Memorandum of Association and Articles of Association of PubCo.

PubCo Ordinary Shares” means, collectively, the PubCo Class A Ordinary Shares and the PubCo Class B Ordinary Shares.

PubCo Public Warrants” means PubCo Warrants other than those that were exchanged for CF V Private Warrants or PIPE Warrants.

PubCo Warrants” means warrants to purchase PubCo Class A Ordinary Shares.

Record Date” means                 , 2021, the record date for the Special Meeting.

Regulatory Approvals” means any necessary or advisable regulatory approvals, Actions, nonactions or waivers in order to complete lawfully the Transactions.

SEC” means the United States Securities and Exchange Commission.

Securities Act” means the United States Securities Act of 1933, as amended.

Series X Additional Shares” means the PubCo Class A Ordinary Shares each Company Series X Shareholder will be entitled to receive if the Adjustment Period VWAP is less than $10.00 per PubCo Class A Ordinary Share. In the event the Adjustment Period VWAP is less than $8.00, the Adjustment Period VWAP for purposes of this calculation will be deemed to be $8.00.

Special Meeting” means the special meeting of the CF V Stockholders, to be held on                 , 2021 at                  Eastern Time, as a virtual meeting. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend, vote your shares and submit questions during the Special Meeting via a live webcast available at                 .

Sponsor” means CFAC Holdings V, LLC, a Delaware limited liability company.

Sponsor Related Parties” means the Sponsor as the initial stockholder of CF V Class B Common Stock, and any permitted transferees (including the independent directors of CF V).

Surviving Corporation” means, with respect to the periods from and after the Initial Merger Effective Time, the Company, the surviving corporation of the Initial Merger.

Trading Day” means any day on which the Trading Market is open for trading.

Trading Market” means the national stock exchange on which the PubCo Class A Ordinary Shares are listed for trading, which we expect will be Nasdaq.

Transactions” means, collectively, the Mergers, the Convertible Notes Conversion and each of the other transactions contemplated by the Merger Agreement or any of the Ancillary Agreements.

Trust Account” means the Trust Account of CF V for the benefit of CF V’s public stockholders.

Trust Agreement” means the Investment Management Trust Agreement, dated as of January 28, 2021, between CF V and the Trustee.

Trustee” means the Continental Stock Transfer & Trust Company, as trustee pursuant to the Trust Agreement.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial of CF V and the Company. These statements are based on the beliefs and assumptions of the management of CF V and the Company. Although CF V and the Company believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither CF V nor the Company can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this proxy statement/prospectus include, but are not limited to, statements about:

 

   

the benefits from the Business Combination;

 

   

CF V’s ability to consummate the Business Combination or, if CF V does not complete the Business Combination, any other initial business combination;

 

   

any satisfaction or waiver (if applicable) of the conditions to the Business Combination, including, among other things: the satisfaction or waiver of certain customary Closing conditions (including the existence of no material adverse effect at CF V or the Company and receipt of certain stockholder approvals contemplated by this proxy statement/prospectus);

 

   

the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

PubCo’s ability to utilize the “controlled company” exemption under the rules of the Trading Market;

 

   

PubCo’s ability to initially list, and once listed, maintain the listing of the PubCo Class A Ordinary Shares on the Trading Market following the Business Combination;

 

   

the Company’s future financial performance following the Business Combination, including any expansion plans and opportunities;

 

   

the Company’s success in retaining or recruiting, or changes required in, its officers, key employees or directors following the Business Combination or any other initial business combination;

 

   

changes in the Company’s strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects and plans;

 

   

the Company’s ability to coordinate with the NOAA Commercial Remote Sensing Regulatory Affairs

 

   

agency to assure an understanding of regulations as they evolve;

 

   

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

 

   

CF V’s officers and directors allocating their time to other businesses and potentially having conflicts of interest with CF V’s business or in approving the Business Combination;

 

   

the ability of CF V and the Company to consummate the PIPE Investment or raise additional financing concurrently with the consummation of the Business Combination or otherwise in the future;

 

   

the use of proceeds not held in the Trust Account or available to CF V from interest income on the Trust Account balance;

 

   

the Company’s expectations surrounding capital requirements as it seeks to build and launch more satellites;

 

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the Company’s expectations surrounding the growth of its commercial platform as a part of its revenues;

 

   

the Company’s expectations surrounding the insurance it will maintain going forward;

 

   

the Company’s ability to conduct remaps of the planet with increasing regularity or frequency as it increases its number of satellites;

 

   

the Company’s ability to productize its internal data analytics platform;

 

   

the Company’s plans to build out its constellation of satellites to 300 by 2025;

 

   

the Company’s ability to launch satellites less expensively than its competitors; and

 

   

the Company’s ability to increase satellite production to meet demand and reach its mapping goals.

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

In addition, statements that CF V or the Company “believes” and similar statements reflect such parties’ beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this proxy statement/prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that either CF V or the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause CF V’s actual results to differ include:

 

   

the occurrence of any event, change or other circumstances that could give rise to the termination of the Business Combination;

 

   

the outcome of any legal proceedings that may be instituted against CF V, the Company or others following announcement of the Business Combination and the transactions contemplated therein;

 

   

the inability to complete the transactions contemplated by the Business Combination due to the failure to obtain approval of the CF V Stockholders or the Company or other conditions to Closing in the Merger Agreement;

 

   

the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the Business Combination;

 

   

the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the ability of PubCo to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees;

 

   

costs related to the proposed Business Combination;

 

   

the possibility that CF V or the Company may be adversely impacted by other economic, business, and/or competitive factors;

 

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future exchange and interest rates;

 

   

the significant uncertainty created by the COVID-19 pandemic;

 

   

the Company is highly dependent on the services of its executive officers;

 

   

the Company may experience difficulties in managing its growth and expanding its operations;

 

   

the success of the Company’s business will be highly dependent on its ability to effectively market and sell its EO services, including to commercial customers, and to convert contracted revenues and its pipeline of potential contracts into actual revenues, which can be a costly process;

 

   

the Company may face risks and uncertainties associated with defense-related contracts, which may have a material adverse effect on its business;

 

   

if the Company is unable to scale production of its satellites as planned, its business and results of operations could be adversely affected;

 

   

the Company is dependent on third parties to transport and launch its satellites into space and any delay could have a material adverse impact on its business, financial condition, and results of operations;

 

   

the market may not accept the Company’s geospatial intelligence, imagery and related data analytic products and services, and its business is dependent upon its ability to keep pace with the latest technological changes;

 

   

the Company’s ability to grow its business depends on the successful production, launch, commissioning and/or operation of its satellites and related ground systems, software and analytic technologies, which is subject to many uncertainties, some of which are beyond its control;

 

   

the market for geospatial intelligence, imagery and related data analytics has not been established with precision, is still emerging and may not achieve the growth potential the Company expects or may grow more slowly than expected;

 

   

if the Company’s satellites fail to operate as intended, it could have a material adverse effect on its business, financial condition and results of operations;

 

   

satellites are subject to production and launch delays, launch failures, damage or destruction during launch, the occurrence of which can materially and adversely affect the Company’s operations; and

 

   

other risks and uncertainties indicated in this proxy statement/prospectus, including those under “Risk Factors” herein, and other filings that have been made or will be made with the SEC by CF V or PubCo.

 

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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The following questions and answers briefly address some commonly asked questions about the proposals to be presented at the Special Meeting of CF V Stockholders. The following questions and answers do not include all the information that is important to CF V Stockholders. We urge the CF V Stockholders to carefully read this entire proxy statement/prospectus, including the annexes and other documents referred to herein.

 

Q.

Why am I receiving this proxy statement/ prospectus?

 

A.

CF V, the Company, PubCo and other parties have agreed to the Business Combination under the terms of the Merger Agreement that is described in this proxy statement/prospectus. The Merger Agreement provides for, among other things, (a) the merger of the Company with and into Target Merger Sub, upon which the separate existence of Target Merger Sub will cease and the Company will be the Surviving Corporation and a direct wholly owned subsidiary of PubCo, and (b) the merger of CF V with and into SPAC Merger Sub, upon which the separate existence of SPAC Merger Sub will cease and CF V will be the surviving corporation and a direct wholly owned subsidiary of PubCo.

As a result of the Mergers, (i) all outstanding shares of capital stock of the Company will be automatically cancelled in exchange for the right to receive the Merger Consideration Shares determined by reference to the Company Exchange Ratio calculated in accordance with the Merger Agreement, which as of September 30, 2021 was 3.34233, (ii) all outstanding options to purchase capital stock of the Company will be converted into Assumed Options, with the number of shares and price per share thereunder adjusted at the Closing based on the Company Exchange Ratio, (iii) the Company Warrant, if outstanding immediately prior to the Initial Merger Effective Time, will be converted into a PubCo Warrant, with the number of shares and price per share thereunder adjusted at the Closing based on the Company Exchange Ratio and calculated in accordance with the terms and conditions of the Company Warrant, (iv) each outstanding CF V Unit will be automatically detached and the holder thereof will be deemed to hold one share of CF V Class A Common Stock and one-third of one CF V Warrant, (v) each outstanding share of CF V Class B Common Stock will automatically convert into one share of CF V Class A Common Stock, (vi) each outstanding share of CF V Class A Common Stock will be cancelled in exchange for the right to receive PubCo Class A Ordinary Shares on a one-for-one basis, and (vii) each outstanding CF V Warrant will be converted into PubCo Warrants, with the number of shares and price per share thereunder adjusted at the Closing based on the CF V Exchange Ratio and calculated in accordance with the terms and conditions of the CF Warrant Agreement.

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting, along with important information about PubCo and the business of PubCo and its subsidiaries following consummation of the Business Combination. You should read this proxy statement/prospectus and its annexes carefully and in their entirety.

 

Q.

What proposals are CF V Stockholders being asked to vote upon?

 

A:

At the Special Meeting, CF V is asking holders of CF V Common Stock to consider and vote upon the following proposals:

 

   

Business Combination Proposal—To vote to adopt the Merger Agreement and approve the transactions contemplated thereby. See the section entitled “The Business Combination Proposal.”

 

   

Adjournment Proposal—To consider and vote upon a proposal to adjourn the Special Meeting to a later date or dates to permit further solicitation and voting of proxies if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal.

 

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CF V shall hold the Special Meeting of its stockholders to consider and vote upon these proposals. This proxy statement/prospectus contains important information about the proposed Business Combination and the other matters to be acted upon at the Special Meeting. Stockholders should read it carefully.

The vote of stockholders is important. Stockholders are encouraged to submit their completed proxy card as soon as possible after carefully reviewing this proxy statement/prospectus.

 

Q:

What are the material differences, if any, in the terms and price of securities issued at the time of the IPO as compared to the securities that will be issued as part of the PIPE Investment at the Closing? Will Sponsor or any of its directors, officers or affiliates participate in the PIPE Investment?

 

A.

CF V issued the CF V Units in the IPO at an offering price of $10.00 per CF V Unit, with each CF V Unit consisting of one share of CF V Class A Common Stock and one-third of one CF V Warrant. At the Closing, each outstanding share of CF V Class A Common Stock will be cancelled in exchange for the right to receive one PubCo Class A Ordinary Share and each CF V Warrant will convert into one PubCo Warrant. In connection with the Closing, the PIPE Investors will purchase PubCo Class A Ordinary Shares at $10.00 per share as part of the PIPE Investment and will therefore hold the same security as the holders of CF V Class A Common Stock immediately after the Business Combination. Pursuant to the PIPE Subscription Agreements, PIPE Investors are entitled to receive PIPE Additional Shares if the Adjustment Period VWAP is less than $10.00 per share as described herein. One PIPE Investor elected to become a Lock-Up PIPE Investor and accordingly will receive PIPE Warrants, in consideration for which such PIPE Investor’s PIPE Shares will be subject to a two-year lock-up. The PIPE Warrants are identical to the CF V Warrants in all material respects except that (i) the issuance of the PIPE Warrants is contingent on the Closing, (ii) the PIPE Warrants have an exercise price of $20.00 and (iii) the PIPE Warrants will be non-redeemable.

The Sponsor has agreed to invest up to an aggregate of approximately $23.2 million in the PIPE Investment on the same terms as the PIPE Investors. Contemporaneously with the execution of the Merger Agreement, the Sponsor entered into the Amended and Restated Forward Purchase Contract pursuant to which the Sponsor will invest an additional $10.0 million for the Forward Purchase Securities, which (assuming a $10.00 share price and a $1.50 warrant price), would represent a discount of approximately 23% to the price being paid by the PIPE Investors for the PIPE Shares being issued. No other director, officer or affiliate of CF V will participate in the PIPE Investment.

 

Q:

What equity stake will holders of CF V Public Shares, holders of Company Shares, the Sponsor Related Parties, and the PIPE Investors hold in PubCo upon completion of the Business Combination?

 

A.

It is anticipated that upon consummation of the Business Combination, PubCo will become a new public company, and the former holders of securities of CF V and the Company, the Sponsor Related Parties and the PIPE Investors shall all become security holders of PubCo.

With respect to the Company’s existing outstanding securities:

 

   

The Company Warrant is currently exercisable for an aggregate of 4,823,594 Company Series A Preference Shares, Company Series B Preference Shares, and Company Series B-1 Preference Shares. At the Closing, the Company Warrant shall instead become exercisable for such number of PubCo Class A Ordinary Shares into which the Company Preference Shares issuable under the Company Warrant would have been converted had such Company Preference Shares been held by the holder of the Company Warrant immediately prior to the Closing.

 

   

In connection with the Business Combination, each Company Series X Preference Share shall convert into such number of PubCo Class A Ordinary Shares equal to (x) $10.00 plus all accrued and unpaid dividends (at an annual rate of 7%), divided by $10.00 (rounded to the nearest whole PubCo Class A Ordinary Share), and subject to the potential receipt of Series X Additional Shares as described in the section titled “The Business Combination Proposal—Related Agreements—Series X Preference Shareholder Agreement” below.

 

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Prior to the Initial Merger Effective Time and in connection with the consummation of the Business Combination, the Company is required to take all appropriate actions to cause all Convertible Notes to automatically convert into a number of Company Preference Shares prior to Initial Merger Effective Time in accordance with the section titled “—Convertible Notes Conversion” below. As of the date hereof, of the $56,587,000 Convertible Notes current principal amount outstanding, holders of $33,587,000 in Convertible Notes have agreed to convert their Convertible Notes at Closing.

The following table sets forth the anticipated ownership of PubCo upon completion of the Business Combination assuming a share price of $8.00 per share, $10.00 per share and $20.00 per share, in each case assuming no redemptions, 50% of maximum redemptions, and maximum redemptions. The ownership percentages reflected in the table are based upon the number of Company Shares and shares of CF V Common Stock issued and outstanding as of September 30, 2021 (and assumes a September 30, 2021 Closing Date), and are subject to the following additional assumptions:

 

   

all holders of Convertible Notes convert their Convertible Notes into Company Shares at Closing and all holders of Company Series X Preference Shares convert their Company Series X Preference Shares into PubCo Class A Ordinary Shares in accordance with the Series X Shareholder Agreement;

 

   

all Company Options and the Company Warrant are exercised prior to Closing;

 

   

no exercise of CF V Warrants, PIPE Warrants or PubCo Warrants;

 

   

no Company Shareholder exercises its rights of appraisal; and

 

   

no issuance of additional securities by PubCo prior to Closing.

For purposes of the table:

No Redemptions: This scenario assumes that no CF V Stockholders exercise redemption rights in connection with the approval of the Business Combination with respect to their CF V Public Shares.

50% of Maximum Redemptions: This scenario assumes that CF V Stockholders exercise redemption rights with respect to approximately 6,250,000 CF V Public Shares (25% of the issued, outstanding and unredeemed CF V Public Shares) in connection with the approval of the Business Combination, at a price of $10.00 per share.

Maximum Redemptions: This scenario assumes that CF V Stockholders exercise redemption rights with respect to 12,500,000 CF V Public Shares (50% of the issued, outstanding and unredeemed CF V Public Shares) in connection with the approval of the Business Combination, at a price of $10.00 per share. This maximum redemption scenario reflects the maximum number of shares of CF V Class A Common Stock that may be redeemed and still allow CF V to meet the Minimum Cash Amount. Assuming this maximum redemption scenario and a price of $10.00 per CF V Public Share, PubCo is expected to have a public float of approximately $125.0 million.

$8.00 per share: This scenario assumes that the maximum number of Additional Shares are issued to the PIPE Investors, the Sponsor and the Company Series X Shareholders, and accordingly that an equal number of PubCo Ordinary Shares are forfeited by the Sponsor, the Company Shareholders and the holders of the Convertible Notes.

$10.00 per share: This scenario assumes no issuance of Additional Shares and no related forfeiture of PubCo Ordinary Shares by the Sponsor, the Company Shareholders and the holders of the Convertible Notes. To the extent the maximum number of Additional Shares are issued to the PIPE Investors, the Sponsor and the Company Series X Shareholders and the closing price of PubCo Class A Ordinary Shares has not yet equaled or exceeded $15.00 for any 20 Trading Days out of 30 Trading Days during the relevant period, the anticipated ownership will be as reflected in the table at $8.00 per share. In the event that any Additional Shares are issued to the PIPE Investors, the Sponsor and the Company Series X Shareholders, a

 

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corresponding number of PubCo Ordinary Shares are forfeited by the Sponsor, the Company Shareholders and the holders of Convertible Notes and the closing price of PubCo Ordinary Shares has not yet equaled or exceeded $15.00 for any 20 Trading Days out of 30 Trading Days during the relevant period, the aggregate number of shares outstanding and the percentage ownership of CF V Public Shares will be the same as set forth in the table below at both $8.00 and $10.00 per share, but the percentage ownership of the remaining categories of shareholders will adjust.

$20.00 per share: This scenario assumes that (1) the maximum number of Additional Shares are issued to the PIPE Investors, the Sponsor and the Company Series X Shareholders and that the corresponding number of PubCo Ordinary Shares that were forfeited by the Sponsor, the Company Shareholders and the holders of the Convertible Notes as a result of the issuance of such Additional Shares were earned back and re-issued to the Sponsor, the Company Shareholders and the holders of the Convertible Notes as a result of the closing price of PubCo Ordinary Shares equaling or exceeding $15.00 for any 20 Trading Days out of 30 Trading Days during the 5 year period after Closing, (2) the Sponsor Earn-Out Shares are earned by the Sponsor and (3) all of the PubCo Warrants are exercised.

If any of these assumptions are not correct, these percentages will be different.

 

    $8.00 per share     $10.00 per share     $20.00 per share  
    No
redemptions
    50% of max
redemptions
    Max
redemptions
    No
redemptions
    50% of max
redemptions
    Max
redemptions
    No
redemptions
    50% of max
redemptions
    Max
redemptions
 

Shares

                 

CF V public shares

    25,000,000       18,750,000       12,500,000       25,000,000       18,750,000       12,500,000       33,333,333       25,000,000       16,666,667  

Sponsor related parties

    9,233,586       9,233,586       9,233,586       8,547,770       8,547,770       8,547,770       11,779,296       11,779,296       11,779,296  

PIPE investors(1)

    5,812,500       5,812,500       5,812,500       4,650,000       4,650,000       4,650,000       8,312,500       8,312,500       8,312,500  

Company shareholders(2)

    73,349,689       73,349,689       73,349,689       75,198,005       75,198,005       75,198,005       75,721,682       75,721,682       75,721,682  

Redeeming shareholders

    —         —         —         —         —         —         —         2,083,333       4,166,667  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    113,395,775       107,145,775       100,895,775       113,395,775       107,145,775       100,895,775       129,146,811       122,896,811       116,646,812  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ownership(3)

                 

CF V public shares

    22.1     17.5     12.4     22.1     17.5     12.4     25.8     20.3     14.3

Sponsor related parties

    8.1     8.6     9.1     7.5     8.0     8.5     9.1     9.6     10.1

PIPE investors(1)

    5.1     5.4     5.8     4.1     4.3     4.6     6.5     6.8     7.1

Company shareholders(2)

    64.7     68.5     72.7     66.3     70.2     74.5     58.6     61.6     64.9

Redeeming shareholders

    0.0     0.0     0.0     0.0     0.0     0.0     0.0     1.7     3.6
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    100.0     100.0     100.0     100.0     100.0     100.0     100.0     100.0     100.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Excludes 2,316,770 PIPE Shares being issued and sold to the Sponsor (which such shares are reflected in the “Sponsor Related Parties” row above).

(2)

Includes holders of Company Ordinary Shares, Company Preference Shares, Company Options and Convertible Notes.

(3)

Approximate percentage of total outstanding PubCo Ordinary Shares immediately following the Closing, subject to the assumptions set forth herein.

 

Q.

What conditions must be satisfied to complete the Business Combination?

 

A.

There are a number of Closing conditions in the Merger Agreement, including, but not limited to, the following:

 

   

approval of the Business Combination Proposal by CF V Stockholders;

 

   

receipt, termination or expiration of, as the case may be, all regulatory approvals and consents;

 

   

the effectiveness of the Registration Statement on Form F-4 in which this proxy statement/prospectus is included and the absence of any issued or pending stop order by the SEC;

 

   

receipt of approval for PubCo Ordinary Shares to be listed on the Trading Market, subject only to official notice of issuance;

 

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the absence of any law or order enjoining or prohibiting the consummation of the Transactions;

 

   

the Available Cash shall be no less than the Minimum Cash Amount; and

 

   

PubCo having net tangible assets of at least $5,000,001 upon the Closing (after giving effect to any CF V Share Redemption, any PIPE Investment and the Forward Purchase Amount).

For a summary of all of the conditions that must be satisfied or waived prior to completion of the Business Combination, see the section entitled “The Business Combination Proposal—The Merger Agreement.”

 

Q.

Why is CF V providing stockholders with the opportunity to vote on the Business Combination?

 

A.

Under the CF V Charter, holders of the CF V Public Shares must have the opportunity to have their CF V Public Shares redeemed upon the consummation of CF V’s initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, CF V has elected to provide its stockholders with the opportunity to have their CF V Public Shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, CF V is seeking to obtain the approval of its stockholders of the Business Combination Proposal in order to allow its public stockholders to effectuate redemptions of their CF V Public Shares in connection with the Closing.

 

Q.

Are there any arrangements to help ensure that there will be sufficient funds to consummate the Business Combination?

 

A.

Yes. On July 5, 2021, CF V and PubCo entered into the PIPE Subscription Agreements with the PIPE Investors, including the Sponsor, pursuant to which the PIPE Investors agreed to purchase, and PubCo agreed to issue and sell to the PIPE Investors, an aggregate of 6,966,770 PubCo Ordinary Shares (subject to adjustment as further described in the section entitled “The Business Combination Proposal—Related Agreements”) for a purchase price of $10.00 per share and gross proceeds to PubCo of approximately $69.7 million in the PIPE Investment, with the Sponsor’s PIPE Subscription Agreement accounting for approximately $23.2 million of the PIPE Investment. Further, on July 5, 2021, CF V, PubCo and the Sponsor entered into the Amended and Restated Forward Purchase Contract, pursuant to which the Sponsor agreed to purchase, and PubCo agreed to issue and sell to the Sponsor, 1,250,000 PubCo Class A Ordinary Shares (subject to adjustment as further described in the section entitled “The Business Combination Proposal—Related Agreements”) and 333,333 PubCo Warrants to purchase PubCo Ordinary Shares for $11.50 each, for an aggregate purchase price of $10,000,000. The closings of the PIPE Investment and the transactions contemplated by the Amended and Restated Forward Purchase Contract are contingent upon, among other customary closing conditions, the substantially concurrent Closing.

During April and May 2021, the Company issued Company Series X Preference Shares in a private placement to certain investors in exchange for an aggregate purchase price of $20,332,300. Contemporaneously with the execution of the Merger Agreement, CF V, PubCo, the Company and the Company Series X Shareholders entered into the Series X Shareholder Agreement, pursuant to which, among other things, the Company Series X Shareholders agreed to, subject to the occurrence of the Closing, waive any rights they may have to require the Company to redeem any of their Company Series X Preference Shares and to allow such shares to convert into PubCo Class A Ordinary Shares in connection with the Closing.

The proceeds from the Trust Account (net of any amounts used to fund redemptions), sale of the Company Series X Preference Shares, the PIPE Investment and the Forward Purchase will be used to pay any loans owed by CF V to the Sponsor, for any unpaid transaction or administrative expenses of CF V and the Company, and any remainder will be used for general corporate purposes, including, but not limited to, working capital for operations, capital expenditures and future acquisitions. In addition, CF V, PubCo and the Company may seek to arrange for additional third-party financing which may be in the form of debt (including bank debt or convertible notes) or equity, the proceeds of which would be used for a variety of purposes.

 

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Q.

How many votes do I have at the Special Meeting?

 

A.

CF V Stockholders are entitled to one vote at the Special Meeting for each share of CF V Common Stock held of record as of                , 2021, the Record Date for the Special Meeting. As of the close of business on the Record Date, there were 31,850,000 shares of CF V Common Stock issued and outstanding.

 

Q.

What vote is required to approve the proposals presented at the Special Meeting?

 

A.

The approval of the Business Combination Proposal requires the affirmative vote of a majority of the issued and outstanding shares of CF V Common Stock as of the Record Date. Accordingly, a CF V Stockholder’s failure to vote by proxy or to vote via the virtual meeting platform at the Special Meeting or an abstention will have the same effect as a vote “AGAINST” the Business Combination Proposal.

The Sponsor and our directors and officers have agreed to vote their shares in favor of the Business Combination Proposal. As a result, we would need only 9,075,001, or approximately 36.3%, of the 25,000,000 CF V Public Shares, to be voted in favor of the Business Combination in order to have the Business Combination approved.

The approval of the Adjournment Proposal requires the affirmative vote of a majority of votes cast by holders of CF V Common Stock present and entitled to vote at the Special Meeting.

 

Q.

What constitutes a quorum at the Special Meeting?

 

A.

Holders of a majority in voting power of CF V Common Stock issued and outstanding and entitled to vote at the Special Meeting constitute a quorum. In the absence of a quorum, the meeting chair has the power to adjourn the Special Meeting. As of the Record Date, 15,925,001 shares of CF V Common Stock would be required to achieve a quorum.

 

Q.

How will the Sponsor and CF V’s directors and officers vote?

 

A.

The Sponsor and CF V’s officers and directors have agreed to vote any shares of CF V Common Stock held by them in favor of the initial business combination, including the Business Combination. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if the Sponsor and CF V’s officers and directors had agreed to vote their shares of CF V Common Stock in accordance with the majority of the votes cast by CF V’s public stockholders.

As a result, we would need only 9,075,001 or approximately 36.3%, of the 25,000,000 CF V Public Shares, to be voted in favor of the Business Combination in order to have the Business Combination approved.

 

Q.

What interests do CF V’s current officers and directors have in the Business Combination?

 

A.

The Sponsor and CF V’s directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) your interest. These interests include:

 

   

CF V’s Existing Charter provides that the doctrine of corporate opportunity will not apply with respect to any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, except as set forth in the Existing Charter. CF V does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, CF V’s officers and directors may become aware of other investment and business opportunities which may be appropriate for presentation to CF V as well as the other entities with which they are affiliated. CF V’s management has pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any pre-existing fiduciary obligation will be presented the opportunity before CF V is presented with it;

 

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unless CF V consummates an initial business combination, CF V’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them on behalf of CF V (no such expenses were incurred that had not been reimbursed as of September 30, 2021) to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;

 

   

the CF V Placement Units, including the CF V Placement Shares, and CF V Placement Warrants, purchased by the Sponsor for $6.0 million will be worthless if a business combination is not consummated;

 

   

the Sponsor has agreed that the CF V Placement Units, and all of their underlying securities, will not be sold or transferred by it until 30 days after CF V has completed a business combination, subject to limited exceptions;

 

   

the fact that Sponsor paid $25,000 or approximately $0.003 per share for the Founders Shares (of which it currently holds 6,230,000), which such Founder Shares, if unrestricted and freely tradeable, would be valued at approximately $61.7 million, based on the closing price of CF V Class A Common Stock on October 11, 2021, and that such shares will be worthless if a business combination is not consummated and that the Sponsor and its affiliates can earn a positive rate of return on their investment even if CF V’s public stockholders experience a negative return following the consummation of the Business Combination;

 

   

the fact that Sponsor has agreed not to redeem any of the Founders Shares or CF V Placement Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

   

if CF V does not complete an initial business combination by February 2, 2023 (or a later date approved by CF V Stockholders pursuant to the CF V Charter), the proceeds from the sale of the CF V Placement Units of $6.0 million will be included in the liquidating distribution to CF V’s public stockholders and the CF V Placement Warrants will expire worthless;

 

   

the fact that upon completion of the Business Combination, a business combination marketing fee of $8.75 million, $5.0 million of M&A advisory fees (which will be $8.0 million if the Available Cash at Closing exceeds $295.0 million), and approximately $2.2 million of placement agent fees will be payable to CF&Co., an affiliate of CF V and the Sponsor;

 

   

if the Trust Account is liquidated, including in the event CF V is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify CF V to ensure that the proceeds in the Trust Account are not reduced below $10.00 per CF V Public Share by the claims of prospective target businesses with which CF V has entered into an acquisition agreement or claims of any third party for services rendered or products sold to CF V, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that the Sponsor has agreed to invest up to an aggregate of up to $23.2 million in the PIPE Investment on the same terms as the PIPE Investors;

 

   

as further described in the section entitled “Certain Relationships and Related Person Transactions The Company Financing Engagement Letter”, the Company has engaged CF&Co. to assist it with any debt financings contemplated by the Company and agreed to pay CF&Co. fees in connection with those debt financings, which debt financings may be sought prior to or following the consummation of the proposed Business Combination;

 

   

the fact that in connection with the IPO, the Sponsor agreed, upon closing of CF V’s initial business combination, to invest $10.0 million in exchange for the Forward Purchase Securities (comprised of 1,250,000 PubCo Class A Ordinary Shares and 333,333 PubCo Warrants), which, assuming a $10.00 share price and a $1.50 warrant price, would represent a discount of approximately 23% to the price being paid by the PIPE Investors for the PIPE Shares being issued;

 

   

the fact that the Sponsor, through its participation in the PIPE Investment and purchase of Forward Purchase Securities, will be entitled to receive PIPE Additional Shares and FPC Additional Shares if

 

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the Adjustment Period VWAP is less than $10.00 (up to a maximum of 579,193 PIPE Additional Shares and 250,000 FPC Additional Shares if the Adjustment Period VWAP is less than $8.00), in which case, the Sponsor would also forfeit 143,376 PubCo Ordinary Shares received in exchange for its Founder Shares pursuant to the Merger Agreement (in which case the Sponsor will have a right to earn back a number of PubCo Ordinary Shares equal to such forfeited shares). Based on the closing price of CF V Class A Common Stock on September 30, 2021, 33,503 Additional Shares would be issued to the Sponsor;

 

   

the fact that the Sponsor has made outstanding loans to CF V in the aggregate amount of $1,197,223 as of September 30, 2021, which amount the Sponsor will lose to the extent that CF V is unable to repay such loans if the amount of such loans exceeds the amount of available proceeds not deposited in the Trust Account if an initial business combination is not completed;

 

   

the fact that CF V’s two independent directors own an aggregate of 20,000 Founder Shares that were transferred by the Sponsor at no cost, which if unrestricted and freely tradeable would be valued at $198,200, based on the closing price of CF V Class A Common Stock on October 11, 2021; and

 

   

the fact that CF V’s existing officers and directors will be eligible for continued indemnification and continued coverage under a directors’ and officers’ liability insurance policy after the business combination and pursuant to the Merger Agreement.

The existence of the interests described above may result in a conflict of interest on the part of CF V’s officers and directors in entering into the Merger Agreement and making their recommendation that you vote in favor of the approval of the Business Combination. In particular, the existence of the interests described above may incentivize CF V’s officers and directors to complete an initial business combination, even if on terms less favorable to CF V’s stockholders compared to liquidating CF V, because, among other things, if CF V is liquidated without completing an initial business combination, the Sponsor’s Founder Shares and CF V Placement Units would be worthless (which, if unrestricted and freely tradable, would be worth an aggregate of approximately $67.9 million based on the closing price of CF V Class A Common Stock and CF V Units on October 11, 2021), out-of-pocket expenses advanced by the Sponsor and loans made by the Sponsor to CF V would not be repaid to the extent such amounts exceed cash held by CF V outside of the Trust Account (which such expenses and loans, as of September 30, 2021, amounted to $1,197,223), and CF&Co. would not receive business combination marketing fees, M&A advisory fees and placement agent fees amounting to $15.95 million, in the aggregate.

 

Q:

Did the CF V Board obtain a fairness opinion in determining whether or not to proceed with the Business Combination?

 

A.

No. The CF V Board did not obtain a fairness opinion in connection with its determination to approve the Business Combination. However, CF V’s management, the members of the CF V Board and the other representatives of CF V have substantial experience in evaluating the operating and financial merits of companies similar to the Company and reviewed certain financial information of the Company and other relevant financial information selected based on the experience and the professional judgment of CF V’s management team, which enabled them to make the necessary analyses and determinations regarding the Business Combination. Accordingly, investors will be relying solely on the judgment of the CF V Board in valuing the Company’s business and assume the risk that the CF V Board may not have properly valued such business.

 

Q:

What factors did the CF V Board consider in determining whether or not to proceed with the Business Combination?

 

A.

The CF V Board considered a number of factors pertaining to the Business Combination as generally supporting its decision to enter into the Merger Agreement and the transactions contemplated thereby, including, but not limited to, (1) the Company’s technological capabilities in the earth observation industry and the large potential addressable market providing for significant growth potential, (2) the belief that the

 

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  Company has sustainable competitive advantages with respect to its technology, (3) the Company’s business has the potential to generate significant free cash flows, (4) the Company has an experienced and capable management team, and (5) that the Company has the opportunity to grow successfully and become a leader in the earth observation industry.

The CF V Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination including, but not limited to: macroeconomic risks generally and in the small satellite earth observation industry, risks that the Company’s business plan and projections may not be achieved, risks relating to the Company’s total addressable market, risks related to the terms of the PIPE Investment, and risks related to CF V’s valuation of the Company’s business and in particular, the lack of a fairness opinion. See the sections titled “The Business Combination Proposal—The CF V Board’s Reasons for the Approval of the Business Combination.”

 

Q:

What happens if I sell my shares of CF V Class A Common Stock before the Special Meeting?

 

A.

The Record Date is earlier than the date of the Special Meeting. If you transfer your shares of CF V Class A Common Stock after the Record Date, but before the date of the Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Special Meeting. However, you will not be able to seek redemption of your shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination in accordance with the provisions described herein. If you transfer your shares of CF V Class A Common Stock prior to the Record Date, you will have no right to vote those shares at the Special Meeting.

 

Q:

What happens if I vote against the Business Combination Proposal?

 

A.

Pursuant to the CF V Charter, if the Business Combination Proposal is not approved and CF V does not otherwise consummate an alternative business combination by February 2, 2023 (or a later date approved by CF V Stockholders pursuant to the CF V Charter), CF V will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the public stockholders, subject to payment of CF V’s tax obligations and up to $100,000 of dissolution expenses.

 

Q:

How do the CF V Public Warrants differ from the CF V Private Warrants and what are the related risks to any holders of CF V Public Warrants following the Business Combination?

 

A.

The CF V Private Warrants are identical to the CF V Public Warrants in all material respects, except that the CF V Private Warrants will not be transferable, assignable or salable until 30 days after the completion of the Business Combination and they will not be redeemable by PubCo so long as they are held by the Sponsor or its permitted transferees. The Sponsor, or its permitted transferees, has the option to exercise the CF V Private Warrants on a cashless basis. If the CF V Private Warrants are held by holders other than the Sponsor or its permitted transferees, the CF V Private Warrants will be redeemable by PubCo in all redemption scenarios and exercisable by the holders on the same basis as the CF V Public Warrants. The PIPE Warrants are identical to the CF V Public Warrants in all material respects except that (i) the issuance of the PIPE Warrants is contingent on the Closing, (ii) the PIPE Warrants have an exercise price of $20.00 and (iii) the PIPE Warrants will be non-redeemable.

Following the Business Combination, PubCo may redeem the PubCo Warrants, other than the PubCo Warrants that were exchanged for CF V Private Warrants or PIPE Warrants (the “PubCo Public Warrants”), prior to their exercise at a time that is disadvantageous to the holder, thereby significantly impairing the value of such warrants. PubCo will have the ability to redeem outstanding PubCo Public Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the closing price of the PubCo Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 Trading Days within a 30 trading day period ending on the third Trading Day prior to the date on which a notice of redemption is sent to

 

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the Warrantholders. PubCo will not redeem the warrants as described above unless a registration statement under the Securities Act covering the PubCo Class A Ordinary Shares issuable upon exercise of such warrants is effective and a current prospectus relating to those PubCo Class A Ordinary Shares is available throughout the 30-day redemption period. If and when the PubCo Public Warrants become redeemable by PubCo, if PubCo has elected to require the exercise of PubCo Public Warrants on a cashless basis, PubCo will not redeem the warrants as described above if the issuance of PubCo Class A Ordinary Shares upon exercise of PubCo Public Warrants is not exempt from registration or qualification under applicable state securities laws or PubCo is unable to effect such registration or qualification. Redemption of the outstanding PubCo Public Warrants could force you (i) to exercise your PubCo Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your PubCo Public Warrants at the then-current market price when you might otherwise wish to hold your PubCo Public Warrants, or (iii) to accept the nominal redemption price which, at the time the outstanding PubCo Public Warrants are called for redemption, is likely to be substantially less than the market value of your PubCo Warrants. The closing price for the CF V Class A Common Stock as of October 11, 2021 was $9.91 and has never exceeded the $18.00 threshold that would trigger the right to redeem the PubCo Public Warrants following the Closing.

PubCo may only call the PubCo Public Warrants for redemption upon a minimum of 30 days’ prior written notice of redemption to each registered holder pursuant to the terms of the CF V Warrant Agreement (as assumed by PubCo at Closing), provided that holders will be able to exercise their PubCo Warrants prior to the time of redemption and, at PubCo’s election, any such exercise may be required to be on a cashless basis.

 

Q:

Do I have redemption rights?

 

A.

Pursuant to the CF V Charter, holders of CF V Public Shares may elect to have their shares redeemed for cash at the applicable redemption price per share calculated in accordance with the CF V Charter. As of September 30, 2021, based on funds in the Trust Account of $250.0 million, this would have amounted to $10.00 per share. If a holder exercises its redemption rights, then such holder will be exchanging its shares of CF V Class A Common Stock for cash. Such a holder will be entitled to receive cash for its CF V Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to CF V’s transfer agent prior to the Special Meeting. See the section titled “Special Meeting of CF V Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash. In connection with the IPO, the Sponsor and CF V’s officers and directors agreed to waive any redemption rights with respect to any shares of CF V Common Stock held by them in connection with the completion of the Business Combination. Such waivers are standard in transactions of this type and the Sponsor and CF V’s officers and directors did not receive separate consideration for the waiver.

 

Q:

Will how I vote affect my ability to exercise redemption rights?

 

A.

No. You may exercise your redemption rights regardless of whether you vote or, if you vote, irrespective of whether you vote “FOR” or “AGAINST”, or abstain from voting on the Business Combination Proposal or the Adjournment Proposal. As a result, the Merger Agreement can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of the Trading Market.

 

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Q:

How do I exercise my redemption rights?

 

A.

In order to exercise your redemption rights, you must, prior to 5:00 p.m., Eastern time, on                , 2021 (two (2) business days before the Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your CF V Public Shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attn: Mark Zimkind

E-mail: mzimkind@continentalstock.com

Please also affirmatively certify in your request to Continental Stock Transfer & Trust Company for redemption if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) with any other stockholder with respect to shares of CF V Class A Common Stock. A holder of the CF V Public Shares, together with any of its affiliates any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13d-3 of the Exchange Act) will be restricted from seeking redemption rights with respect to an aggregate of 15% or more of the CF V Public Shares, which we refer to as the “15% threshold.” Accordingly, all CF V Public Shares in excess of the 15% threshold beneficially owned by a CF V public stockholder or group will not be redeemed for cash. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is CF V’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, CF V does not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with CF V’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for redemption to CF V’s transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that CF V’s transfer agent return the shares (physically or electronically). You may make such request by contacting CF V’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

 

Q:

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

 

A.

CF V expects that a U.S. holder (as defined below in “Material Tax Considerations—U.S. Federal Income Tax Considerations”) that exercises its redemption rights to receive cash from the Trust Account in exchange for all of its CF V Public Shares will generally be treated as selling such shares resulting in the recognition of capital gain or capital loss. There may be certain circumstances in which the redemption may be treated as a distribution for U.S. federal income tax purposes, or as integrated with the Business Combination. For a more complete discussion of the U.S. federal income tax considerations of an exercise of redemption rights, see “Material Tax Considerations—U.S. Federal Income Tax Considerations—Material U.S. Federal Income Tax Consequences of the Redemption to the Holders of CF V Common Stock” and “Risk Factors—Risks Related to U.S. Federal Income Taxation.”

TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF EXERCISING YOUR REDEMPTION RIGHTS WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXERCISE OF REDEMPTION RIGHTS TO YOU IN YOUR PARTICULAR CIRCUMSTANCES.

 

Q:

If I am a CF V Warrant holder, can I exercise redemption rights with respect to my CF V Warrants?

 

A.

No. The holders of CF V Warrants have no redemption rights with respect to such CF V Warrants.

 

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Q:

If I am a holder of CF V Units, can I exercise redemption rights with respect to my CF V Units?

 

A.

No. Holders of outstanding CF V Units must separate the underlying CF V Public Shares and CF V Public Warrants prior to exercising redemption rights with respect to the CF V Public Shares.

If you hold CF V Units registered in your own name, you must deliver the certificate for such CF V Units to Continental Stock Transfer & Trust Company, CF V’s transfer agent, with written instructions to separate such CF V Units into CF V Public Shares and CF V Public Warrants. This must be completed far enough in advance to permit the mailing of the CF V Public Share certificates back to you so that you may then exercise your redemption rights upon the separation of the CF V Public Shares from the CF V Units. See “How do I exercise my redemption rights?” above. The address of Continental Stock Transfer & Trust Company is listed under the question “Who can help answer my questions?” below.

If a broker, dealer, commercial bank, trust company or other nominee holds your CF V Units, you must instruct such nominee to separate your CF V Units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company, CF V’s transfer agent. Such written instructions must include the number of CF V Units to be split and the nominee holding such CF V Units. Your nominee must also initiate electronically, using DTC’s deposit withdrawal at custodian (DWAC) system, a withdrawal of the relevant CF V Units and a deposit of an equal number of CF V Public Shares and CF V Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the CF V Public Shares from the CF V Units. While this is typically done electronically the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your CF V Public Shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

 

Q:

Do I have appraisal rights if I object to the proposed Business Combination?

 

A.

No. There are no appraisal rights available to holders of CF V Common Stock, CF V Units or CF V Warrants in connection with the Business Combination.

 

Q:

What happens to the funds deposited in the Trust Account upon consummation of the Business Combination?

 

A.

If the Business Combination is consummated, the funds held in the Trust Account will be released to:

 

   

pay CF V Stockholders who properly exercise their redemption rights;

 

   

pay the $8,750,000 business combination marketing fee to CF&Co.;

 

   

pay certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees, and other professional fees) that were incurred by CF V or the Company in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement;

 

   

repay any loans owed by CF V to the Sponsor for any CF V Transaction Expenses or other administrative expenses incurred by CF V; and

 

   

provide for general corporate purposes of PubCo including, but not limited to, working capital for operations of the Company.

 

Q:

What happens if the Business Combination is not consummated?

 

A.

There are certain circumstances under which the Merger Agreement may be terminated. See the section titled “The Business Combination Proposal—The Merger Agreement” for information regarding the parties’ specific termination rights.

 

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If, as a result of the termination of the Merger Agreement or otherwise, CF V is unable to complete the Business Combination or another initial business combination transaction by February 2, 2023 (or a later date approved by CF V Stockholders pursuant to the CF V Charter), the CF V Charter provides that CF V will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, subject to lawfully available funds therefor, redeem 100% of the CF V Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to it to pay taxes payable and up to $100,000 for dissolution expenses, by (B) the total number of then outstanding CF V Public Shares, which redemption will completely extinguish rights of the public stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemptions, subject to the approval of the remaining stockholders and the CF V Board in accordance with applicable law, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to its obligations under the DGCL to provide for claims of creditors and other requirements of applicable law.

CF V expects that the amount of any distribution its public stockholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to CF V’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Holders of Founders Shares have waived any right to any liquidation distribution with respect to those shares.

In the event of liquidation, there will be no distribution with respect to outstanding CF V Warrants. Accordingly, the CF V Warrants will expire worthless.

 

Q.

When is the Business Combination expected to be completed?

The Closing is expected to take place on (a) the third business day following the satisfaction or waiver of the conditions described below under the section titled “The Business Combination Proposal—Conditions to the Closing (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver thereof) or (b) such other date as agreed to by the parties to the Merger Agreement in writing, in each case, subject to the satisfaction or waiver of the Closing conditions. The Merger Agreement may be terminated by CF V and/or the Company upon the occurrence of certain events. For a description of the conditions to the completion of the Business Combination, see the section titled “The Business Combination Proposal.”

 

Q:

What are the U.S. federal income tax consequences to me of the Business Combination?

 

A.

Subject to the limitations and qualifications described in “Material Tax Considerations—U.S. Federal Income Tax Considerations—Material U.S. Federal Income Tax Consequences of the Business Combination” below (including the discussion of Section 367(a) of the Code), the exchange by U.S. holders of their CF V Class A Common Stock for PubCo Class A Ordinary Shares pursuant to the Merger Agreement, taken together with the related transactions, should qualify either as a transfer of property to a corporation under Section 351 of the Code or as a reorganization under Section 368 of the Code.

CF V and PubCo have agreed pursuant to the Merger Agreement to report the CF V Merger as a reorganization under Section 368 of the Code. If the CF V Merger is treated as a reorganization under Section 368 of the Code, a U.S. holder of CF V Public Warrants that are converted to PubCo Warrants likely would not recognize gain or loss. However, the qualification of the CF V Merger as a reorganization under Section 368 of the Code is uncertain. If the CF V Merger is not treated as a reorganization under Section 368 of the Code, a U.S. holder that solely owns CF V Public Warrants generally will be required to recognize gain or loss upon the conversion of those CF V Public Warrants to PubCo Warrants and a U.S. holder that owns CF V Public Warrants and CF V Class A Common Stock generally will be required to recognize gain (but may not be permitted to recognize loss) upon receipt of PubCo Warrants.

 

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Section 367(a) of the Code and the Treasury regulations promulgated thereunder, in certain circumstances, may impose additional requirements for certain U.S. holders to qualify for tax-deferred treatment with respect to the exchange of CF V Class A Common Stock and/or the conversion of the CF V Public Warrants. If those additional requirements are not met, it could result in holders recognizing a greater amount of gain for U.S. federal income tax purposes than they would have recognized if the CF V Merger and related transactions had not qualified for non-recognition of gain or loss or Section 367(a) of the Code had not applied.

For a more complete discussion of the U.S. federal income tax considerations of the Business Combination, see “Material Tax Considerations—U.S. Federal Income Tax Considerations—Material U.S. Federal Income Tax Consequences of the Business Combination” and “Risk Factors—Risks Related to U.S. Federal Income Taxation.

 

Q:

When and where is the Special Meeting?

 

A.

The Special Meeting will be held at                Eastern Time, on                , as a virtual meeting. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend, vote your shares and submit questions during the Special Meeting via a live webcast available at .

 

Q.

How can I attend the Special Meeting virtually?

 

A.

CF V is pleased to conduct the Special Meeting virtually via the Internet through a live webcast and online shareholder tools. CF V is offering CF V Stockholders the ability to attend the Special Meeting virtually due to the continuing impact of and uncertainty surrounding the COVID-19 pandemic and to support the health and well-being of CF V Stockholders. However, CF V also believes a virtual format facilitates stockholder attendance and participation by leveraging technology to allow CF V to communicate more effectively and efficiently with its stockholders. This format empowers CF V Stockholders around the world to participate at no cost. CF V will use the virtual format to enhance stockholder access and participation and protect stockholder rights.

 

Q.

What do I need to do now?

 

A.

You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder and/or warrant holder of CF V. Stockholders should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares of CF V through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q.

How do I vote?

 

A.

If you are a holder of record of CF V Common Stock on                , 2021, the Record Date, you may vote with respect to the Proposals at the Special Meeting via the virtual meeting platform, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the Special Meeting and vote via the virtual meeting platform, obtain a proxy from your broker, bank or nominee.

 

Q.

What will happen if I abstain from voting or fail to vote at the Special Meeting?

 

A.

At the Special Meeting, CF V will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for purposes of determining whether a quorum is present. Abstentions will

 

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  have the same effect as a vote “AGAINST” the Business Combination Proposal, but will have no effect on the Adjournment Proposal. Broker non-votes will not be counted as present for the purposes of establishing a quorum and will have no effect on any of the Proposals.

 

Q.

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A.

Signed and dated proxies received by CF V without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each Proposal presented to the stockholders at the Special Meeting. The proxyholders may use their discretion to vote on any other matters which properly come before the Special Meeting.

 

Q.

If I am not going to attend the Special Meeting, should I return my proxy card instead?

 

A.

Yes. Whether you plan to attend the Special Meeting or not, please read the enclosed proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A.

No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. CF V believes the Proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

Q.

May I change my vote after I have mailed my signed proxy card?

 

A.

Yes. Stockholders may send a later-dated, signed proxy card to CF V’s secretary at the address set forth below so that it is received by CF V’s secretary prior to the Special Meeting or attend the Special Meeting and vote via the virtual meeting platform. Stockholders also may revoke their proxy by sending a notice of revocation to CF V’s secretary, which must be received by CF V’s secretary prior to the Special Meeting.

 

Q.

What should I do if I receive more than one set of voting materials?

 

A.

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares.

 

Q.

Who will solicit and pay the cost of soliciting proxies?

 

A:

CF V will pay the cost of soliciting proxies for the Special Meeting. CF V has engaged Morrow Sodali LLC, which we refer to as “Morrow,” to assist in the solicitation of proxies for the Special Meeting. CF V has agreed to pay a fee of $32,500, plus disbursements. CF V will reimburse Morrow for reasonable out-of-pocket expenses and will indemnify Morrow and its affiliates against certain claims, liabilities, losses, damages and expenses. CF V will also reimburse banks, brokers and other custodians, nominees and

 

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  fiduciaries representing beneficial owners of shares of CF V Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the CF V Common Stock and in obtaining voting instructions from those owners. CF V’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

Q.

Who can help answer my questions?

 

A.

If you have questions about the Business Combination or the Proposals, or if you need additional copies of the proxy statement/prospectus or the enclosed proxy card you should contact:

CF Acquisition Corp. V

110 East 59th Street

New York, New York 10022

Tel: (212) 938-5000

E-mail: CFV@cantor.com

You may also contact our proxy solicitor at:

Morrow Sodali LLC

Tel: (800) 662-5200 or (203) 658-9400 (banks and brokers)

Email:

To obtain timely delivery, CF V Stockholders must request the materials no later than                 , 2021.

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

If you intend to seek redemption of your CF V Public Shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to CF V’s transfer agent prior to the Special Meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attn: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary, together with the section titled “Questions and Answers about the Proposals,” summarizes certain information contained in this proxy statement/prospectus and does not contain all of the information that is important to you. To better understand the Business Combination and the Proposals to be considered at the Special Meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section titled “Where You Can Find More Information.”

Unless otherwise indicated or the context otherwise requires, references in this Summary of the Proxy Statement/Prospectus to “PubCo” refer to PubCo and its consolidated subsidiaries (including CF V and the Company) after giving effect to the Business Combination, references to “CF V” refer to CF Acquisition Corp. V and references to “the Company” refer to Nettar Group Inc. (d/b/a Satellogic) and its consolidated subsidiaries.

Unless otherwise specified, all share calculations assume no exercise of redemption rights by the CF V’s public stockholders and do not include any shares of CF V Common Stock issuable upon the exercise of the CF V Warrants.

Information About the Parties to the Business Combination

CF Acquisition Corp. V

CF V is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. CF V Class A Common Stock, CF V Units, and CF V Warrants are currently listed on Nasdaq under the symbols “CFV,” “CFFVU” and “CFFVW”, respectively. The mailing address of CF V’s principal executive officer is 110 East 59th Street, New York, NY 10022.

For more information about CF V, see the sections entitled “CF V’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Information Related to CF V.”

The Company

The Company’s predecessor in interest was founded in 2010 and the Company was founded in 2014, to help solve some of the greatest challenges of our time: resource utilization and distribution by providing its customers with access to a continually refreshed source of global, high-quality data that is critical to better inform decision-making aimed at addressing these challenges.

The Company is the first vertically integrated geospatial analytics company and is building the first scalable, fully automated Earth Observation (“EO”) platform with the ability, when scaled, to remap the entire planet at both high-frequency and high-resolution, providing accessible and affordable solutions for its customers. The Company plans to democratize access to geospatial data by providing planetary insights at what it believes to be the lowest cost in the industry, ultimately driving better decision-making across a broad range of industries including agriculture, forestry, energy, financial services, and cartography.

The mailing address of the Company’s principal executive offices is Ruta 8 Km 17,500, Edificio 300 Oficina 324 Zonamérica Montevideo, 91600, Uruguay.

PubCo

PubCo was incorporated under the laws of the British Virgin Islands on June 29, 2021 and is a direct wholly owned subsidiary of the Company. PubCo was formed for the sole purpose of entering into and consummating

 

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the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, nor any outstanding commitments other than as described in the Merger Agreement. Prior to the consummation of the Business Combination, the directors of PubCo are Rick Dunn and Rebeca Brandys.

The address of PubCo’s registered office is Maples Corporate Services (BVI) Limited, Kingston Chambers, PO Box 173, Road Town, Tortola, BVI and its registration number is 2067782. Upon the Closing, its principal office will be that of the Company, located at Ruta 8 Km 17,500, Edificio 300 Oficina 324 Zonamérica Montevideo, 91600, Uruguay and its telephone number will be 00-598-25182302.

Upon the effectiveness of the registration statement of which this prospectus forms a part, PubCo will report under the Exchange Act as a non-U.S. public company with foreign private issuer status. Even after PubCo no longer qualifies as an emerging growth company, as long as PubCo continues to qualify as a foreign private issuer under the Exchange Act, PubCo will be exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including:

 

   

the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act;

 

   

the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

 

   

the rules under the Exchange Act requiring the filing with the Securities and Exchange Commission, or SEC, of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.

In addition, PubCo will not be required to file annual reports and financial statements with the SEC as promptly as U.S. domestic companies whose securities are registered under the Exchange Act, and are not required to comply with Regulation FD, which restricts the selective disclosure of material information.

As a foreign private issuer, PubCo will be permitted to follow home country corporate governance practices instead of certain corporate governance practices required by the Trading Market for U.S. domestic issuers. Also, upon completion of the Business Combination, PubCo will be a “controlled company” within the meaning of the Trading Market corporate governance standards and eligible to take advantage of exemptions from certain the Trading Market corporate governance standards.

Target Merger Sub

Target Merger Sub was incorporated under the laws of the British Virgin Islands on June 29, 2021. Target Merger Sub was formed solely in contemplation of the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, nor any outstanding commitments other than as set forth in the Merger Agreement.

The address of Target Merger Sub’s registered office is Maples Corporate Services (BVI) Limited, Kingston Chambers, PO Box 173, Road Town, Tortola, BVI.

SPAC Merger Sub

SPAC Merger Sub was incorporated under the laws of Delaware on June 29, 2021. SPAC Merger Sub was formed solely in contemplation of the Business Combination, has not commenced any operations, has only nominal assets and has no liabilities or contingent liabilities, nor any outstanding commitments other than as set forth in the Merger Agreement.

 

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The address of SPAC Merger Sub’s registered office is c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware 19808.

The Proposals to be Voted on by CF V Stockholders

The Business Combination Proposal

CF V and the Company have agreed to the Business Combination under the terms of the Merger Agreement, dated as of July 5, 2021. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the Closing, (i) the Initial Merger will be consummated pursuant to which Target Merger Sub will merge with and into the Company, with the Company continuing as the Surviving Corporation of the Initial Merger and becoming a wholly owned subsidiary of PubCo, and (ii) immediately following confirmation of the effective filing of the Initial Merger, SPAC Merger Sub will merge with and into CF V, with CF V continuing as the surviving corporation of the CF V Merger and a direct wholly owned subsidiary of PubCo. For more information about the Merger Agreement and the Business Combination (including the Mergers), see the section titled “The Business Combination Proposal.”

The Adjournment Proposal

CF V Stockholders will be asked to consider and vote upon a proposal to adjourn the Special Meeting to a later date or dates if, based upon the tabulated vote at the time of the Special Meeting, there are not sufficient votes to approve the Business Combination Proposal. Please see the section titled “The Adjournment Proposal.”

Transaction Agreements

The Merger Agreement

On July 5, 2021, CF V, PubCo, Target Merger Sub, SPAC Merger Sub and the Company entered into the Merger Agreement.

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, upon the Closing, (i) Target Merger Sub will merge with and into the Company, whereby the separate corporate existence of Target Merger Sub will cease and the Company will be the Surviving Corporation of the Initial Merger and become a wholly owned subsidiary of PubCo, and (ii) immediately following confirmation of the effective filing of the Initial Merger, SPAC Merger Sub will merge with and into CF V, whereby the separate corporate existence of SPAC Merger Sub will cease and CF V will be the surviving corporation of the SPAC Merger and a direct wholly owned subsidiary of PubCo.

As a result of the Mergers, (i) all outstanding shares of capital stock of the Company will be automatically cancelled in exchange for the right to receive the Merger Consideration Shares determined by reference to the Company Exchange Ratio calculated in accordance with the Merger Agreement, which as of September 30, 2021 was 3.34233, (ii) all outstanding options to purchase capital stock of the Company will be converted into Assumed Options, with the number of shares and price per share thereunder adjusted at the Closing based on the Company Exchange Ratio, (iii) the Company Warrant, if outstanding immediately prior to the Initial Merger Effective Time, will be assumed by PubCo and converted into a PubCo Warrant, with the number of shares and price per share thereunder adjusted at the Closing based on the Company Exchange Ratio and calculated in accordance with the terms and conditions of the Company Warrant, (iv) each outstanding CF V Unit will be automatically detached and the holder thereof will be deemed to hold one share of CF V Class A Common Stock and one-third of one CF V Warrant, (v) each outstanding share of CF V Class B Common Stock will automatically convert into one share of CF V Class A Common Stock, (vi) each outstanding share of CF V Class A Common Stock will be cancelled in exchange for the right to receive PubCo Class A Ordinary Shares

 

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that is equal to the CF V Exchange Ratio, and (vii) each outstanding CF V Warrant will be converted into a PubCo Warrant, with the number of shares and price per share thereunder adjusted at the Closing based on the CF V Exchange Ratio and calculated in accordance with the terms and conditions of the CF Warrant Agreement.

Prior to the Initial Merger Effective Time and in connection with the consummation of the Business Combination, the Company is required to take all appropriate action to cause all Convertible Notes to automatically convert prior to Initial Merger Effective Time into a number of Company Preference Shares in accordance with the section titled “—Convertible Notes Conversion” below. Of the $56,587,000 Convertible Notes current principal amount outstanding, holders of $33,587,000 in Convertible Notes have agreed to convert their Convertible Notes at Closing.

A portion of the PubCo Ordinary Shares issuable at the Closing to the Sponsor, the Company Shareholders and holders of Convertible Notes (including shares issuable in connection with the conversion of the Convertible Notes but excluding shares issuable in respect of the Company Series X Preference Shares) will be subject to escrow and potential forfeiture, as well as the right to receive an aggregate number of PubCo Ordinary Shares equal to the number of shares that have been forfeited subject to the closing price of the PubCo Class A Ordinary Shares meeting a price threshold during the five-year period following the Closing in accordance with the section titled “—Forfeiture of Sponsor and Company Shareholder Escrowed Shares; Earnout” below.

Representations, Warranties and Covenants

The Merger Agreement contains customary representations and warranties of the parties, which shall not survive the Closing. Many of the representations and warranties are qualified by materiality or Company Material Adverse Effect or CF V Material Adverse Effect (each as defined in the section entitled “The Business Combination Proposal—The Merger Agreement—Material Adverse Effect”).

The Merger Agreement also contains pre-closing covenants of the parties, including obligations of the parties to use reasonable efforts to operate their respective businesses in the ordinary course consistent with past practice, and to refrain from taking certain specified actions without the prior written consent of the other applicable parties, in each case, subject to certain exceptions and qualifications. Additionally, the parties have agreed not to solicit, negotiate or enter into competing transactions, as further provided in the Merger Agreement. The covenants do not survive the Closing (other than those that are to be performed after the Closing).

CF V and the Company agreed, as promptly as practicable after the execution of the Merger Agreement, to prepare, and CF V and PubCo agreed to file with the SEC, a registration statement on Form F-4 (as amended, the “Registration Statement”) in connection with the registration under the Securities Act of the issuance of the PubCo Class A Ordinary Shares and the PubCo Warrants to be issued to the CF V Stockholders and Company Shareholders, and containing a proxy statement/prospectus for the purpose of CF V soliciting proxies from its stockholders to obtain the Stockholders’ Approval at the Special Meeting and providing such stockholders an opportunity, in accordance with the governing documents of CF V, to have their shares of CF V Class A Common Stock redeemed.

PubCo agreed to take all necessary action so that, effective at the Closing, the entire board of directors of PubCo will consist of no less than three (3) individuals, a majority of whom shall be independent directors in accordance with applicable stock exchange requirements, and which shall comply with all diversity requirements under applicable law.

Conditions to the Parties’ Obligations to Consummate the Mergers

Under the Merger Agreement, the obligations of the parties to consummate (or cause to be consummated) the Business Combination are subject to a number of customary conditions for special purpose acquisition

 

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companies, including, among others, the following: (i) the approval of the Mergers and the other Proposals required to approve the Transactions by CF V’s Stockholders and the Company Shareholders, (ii) all specified approvals or consents (including governmental and regulatory approvals) and all waiting or other periods have been obtained or have expired or been terminated, as applicable, (iii) the effectiveness of the Registration Statement, (iv) PubCo’s initial listing application with Nasdaq or NYSE shall have been conditionally approved and, immediately following the Closing, PubCo shall satisfy any applicable initial and continuing listing requirements of Nasdaq or NYSE and PubCo shall not have received any notice of non-compliance therewith, (v) the PubCo Class A Ordinary Shares and the PubCo Warrants having been approved for listing on Nasdaq or NYSE, subject to round lot holder requirements, and (vi) PubCo having a minimum of $5,000,001 of net tangible assets upon the Closing (after giving effect to any CF V Share Redemption, any PIPE Investment and the Forward Purchase Amount).

The obligations of CF V to consummate (or cause to be consummated) the Business Combination are also subject to, among other things, (i) the representations and warranties of the Company and of each Acquisition Entity being true and correct, subject to the knowledge and materiality standards contained in the Merger Agreement, (ii) material compliance by the Company and each Acquisition Entity with its pre-Closing covenants, subject to the knowledge and materiality standards contained in the Merger Agreement, and (iii) there has not been any event that has had, or would be reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect.

In addition, the obligations of the Company to consummate (and cause to be consummated) the Business Combination are also subject to, among other things (i) the representations and warranties of CF V being true and correct, subject to the materiality standards contained in the Merger Agreement, (ii) material compliance by CF V with its pre-Closing covenants, subject to the knowledge and materiality standards contained in the Merger Agreement, (iii) there having not occurred any event that has had, or would be reasonably expected to have, individually or in the aggregate, a CF V Material Adverse Effect, and (iv) the Available Cash being at least $225 million.

Termination Rights

The Merger Agreement contains certain termination rights, including, among others, the following: (i) upon the mutual written consent of CF V and the Company, (ii) if the consummation of the Business Combination is prohibited by law or otherwise prevented by a governmental order, (iii) if the Closing has not occurred on or before February 28, 2022, (iv) in connection with an uncured breach of a representation, warranty, covenant or other agreement by a party, (v) by either CF V or the Company if the board of directors of the other party publicly changes its recommendation with respect to the Merger Agreement and Business Combination and related stockholder or shareholder approvals, (vi) by either CF V or the Company if the Special Meeting is held and CF V Stockholders’ Approval is not received, (vii) by CF V if the unaudited financials of the Company for the first, second and third quarters of 2021 (with respect to the first and third quarters, to the extent required in accordance with the Merger Agreement) have not been delivered by July 14, 2021, October 12, 2021 and January 12, 2022, respectively, or (viii) by CF V if the Company does not receive the written consent of its shareholders to the Merger Agreement and related approvals within five business days after the Registration Statement has become effective.

None of the parties to the Merger Agreement are required to pay a termination fee or reimburse any other party for its expenses as a result of a termination of the Merger Agreement. However, each party will remain liable for willful and material breaches of the Merger Agreement prior to termination.

 

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Trust Account Waiver

The Company and each Acquisition Entity agreed that it and its affiliates will not have any right, title, interest or claim of any kind in or to any monies in the Trust Account held for CF V’s public stockholders, and agreed not to, and waived any right to, make any claim against the Trust Account (including any distributions therefrom).

PIPE Subscription Agreements

Contemporaneously with the execution of the Merger Agreement, CF V and PubCo entered into separate PIPE Subscription Agreements with a number of PIPE Investors, including the Sponsor, pursuant to which the PIPE Investors agreed to purchase, and PubCo agreed to issue and sell to the PIPE Investors, an aggregate of 6,966,770 PubCo Class A Ordinary Shares, for a purchase price of $10.00 per share and gross proceeds to PubCo of approximately $69.7 million, with the Sponsor’s PIPE Subscription Agreement accounting for approximately $23.2 million of the PIPE Investment. Pursuant to the PIPE Subscription Agreements, PIPE Investors are entitled to receive PIPE Additional Shares if the Adjustment Period VWAP is less than $10.00 per share (up to a maximum of 1,741,692 PIPE Additional Shares, if the Adjustment Period VWAP is less than or equal to $8.00 per share, in connection with which an equal number of PubCo Ordinary Shares held by the Sponsor, the Company Shareholders and holders of Convertible Notes would be forfeited and cancelled) and PIPE Investors who agreed to be Lock-Up PIPE Investors will receive PIPE Warrants pursuant to the Lock-Up Addendum.

Pursuant to the PIPE Subscription Agreements, PubCo agreed to register the resale of the PubCo Ordinary Shares and PubCo Warrants issued thereunder pursuant to the F-1 Registration Statement. For more information, see “The Business Combination Proposal—Related Agreements—PIPE Subscription Agreements.”

Amended and Restated Forward Purchase Contract

Contemporaneously with the execution of the Merger Agreement, Sponsor, CF V and PubCo entered into the Amended and Restated Forward Purchase Contract, pursuant to which the Sponsor agreed to purchase, and PubCo agreed to issue and sell to the Sponsor, 1,250,000 PubCo Class A Ordinary Shares and 333,333 warrants to purchase PubCo Class A Ordinary Shares for $11.50 each, for an aggregate purchase price of $10,000,000. Pursuant to the Amended and Restated Forward Purchase Contract, the Sponsor is entitled to receive the FPC Additional Shares if the Adjustment Period VWAP is less than $10.00 per share (up to a maximum of 250,000 FPC Additional Shares, if the Adjustment Period VWAP is less than or equal to $8.00 per share, in connection with which an equal number of PubCo Ordinary Shares held by the Sponsor, the Company Shareholders and holders of Convertible Notes would be forfeited and cancelled). Pursuant to the Amended and Restated Forward Purchase Contract, PubCo agreed to register the resale of the PubCo Ordinary Shares, PubCo Warrants and FPC Additional Shares issued to Sponsor thereunder pursuant to the F-1 Registration Statement. For more information, see “The Business Combination Proposal—Related Agreements—Amended and Restated Forward Purchase Contract.”

Shareholder Support Agreement

Contemporaneously with the execution of the Merger Agreement, CF V, PubCo, the Company and certain Company Shareholders and/or holders of Convertible Notes entered into a Shareholder Support Agreement (the “Shareholder Support Agreement”), pursuant to which, among other things, (a) certain Company Shareholders agreed (i) not to transfer their Company shares, and to vote their Company Shares in favor of the Merger Agreement (including by execution of a written consent), the Mergers and the other Transactions, (ii) to consent to the termination of certain shareholder agreements with the Company (with certain exceptions), effective at Closing, and (iii) to release the Sponsor, CF V, the Company and its subsidiaries from pre-Closing claims,

 

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subject to customary exceptions, and (b) certain holders of Convertible Notes agreed not to redeem their Convertible Notes. The securityholders party to the Shareholder Support Agreement collectively have a sufficient number of votes to approve the Mergers. For more information, see “The Business Combination Proposal—Related Agreements—Shareholder Support Agreement.”

Sponsor Support Agreement

Contemporaneously with the execution of the Merger Agreement, CF V entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”) with the Sponsor, PubCo and the Company, pursuant to which, among other things, (i) for the benefit of the Company, the Sponsor agreed to comply with its obligations under the Insider Letter, and CF V agreed to enforce such obligations, and CF V and the Sponsor provided the Company with certain consent rights with respect to transfers of CF V securities (and as of the Closing, PubCo securities) owned by the Sponsor and amendments, modifications or waivers under the Insider Letter, (ii) the Sponsor agreed to waive its anti-dilution rights with respect to its shares of CF V Class B Common Stock under the CF V Charter, (iii) the Sponsor agreed to be bound by the Forfeiture Escrow Shares (as defined below) and earnout provisions under the Merger Agreement summarized herein, (iv) the Sponsor agreed to release CF V, PubCo, the Company, the Company’s affiliates, the Acquisition Entities and their respective subsidiaries effective as of the Closing from all pre-Closing claims, subject to customary exceptions and (v) the Sponsor agreed to subject certain PubCo Class A Ordinary Shares to be received in exchange for its shares of CF V Class B Common Stock as a result of the Mergers to certain vesting and forfeiture restrictions. For more information, see “The Business Combination Proposal—Related Agreements—Sponsor Support Agreement.”

Lock-Up Agreement

Concurrently with the execution of the Merger Agreement, CF V and PubCo entered into separate Lock-Up Agreements (each a “Lock-Up Agreement”) with each of the Company Lock-Up Securityholders, pursuant to which the securities of PubCo received by such Company Lock-Up Securityholder in the Mergers will be locked-up and subject to transfer restrictions for a period of time following the Closing, as described below, subject to certain exceptions. The Lock-Up Securities held by such Lock-Up Company Securityholders will be locked-up commencing from the Closing until the earliest of: (i) the one (1) year anniversary of the date of the Closing, (ii) the date on which the closing price of the PubCo Ordinary Shares equals or exceeds $20.00 per share (adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), for any 20 Trading Days within any 30-Trading Day period commencing at least 180 days after the Closing Date, (iii) with respect to 25% of the Lock-Up Securities owned by such Lock-Up Company Securityholders, the date on which the closing price of the PubCo Ordinary Shares equals or exceeds $15.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 Trading Days within any 30-Trading Day period commencing at least 180 days after the Closing Date, and (iv) subsequent to the Closing, the date on which PubCo consummates a liquidation, merger, capital stock exchange, reorganization, or other similar transaction which results in all of PubCo’s shareholders having the right to exchange their PubCo Ordinary Shares for cash, securities or other property.

Series X Preference Shareholder Agreement

During April and May 2021, the Company issued Company Series X Preference Shares in a private placement to certain investors in exchange for an aggregate purchase price of $20,332,300. Contemporaneously with the execution of the Merger Agreement, CF V, PubCo, the Company and the Company Series X Shareholders entered into a Series X Preference Shareholder Agreement (the “Series X Shareholder Agreement”), pursuant to which, among other things, the Company Series X Shareholders agreed to, subject to the occurrence of the Closing, waive any rights to redeem, and any obligation of the Company to redeem, any of their Company Series X Preference Shares and allow such shares to convert into PubCo Class A Ordinary Shares.

 

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In addition, in the event the Adjustment Period VWAP is less than $10.00 per PubCo Class A Ordinary Share, each Company Series X Shareholder will be entitled to receive a certain number of additional PubCo Class A Ordinary Shares calculated in a similar manner as the PIPE Additional Shares and FPC Additional Shares (up to a maximum of 523,677 additional PubCo Class A Ordinary Shares (calculated assuming a Closing Date of September 30, 2021)), if the Adjustment Period VWAP is less than or equal to $8.00 per share, in connection with which issuance an equal number of PubCo Ordinary Shares held by the Sponsor, the Company Shareholders and holders of Convertible Notes would be forfeited and cancelled). For more information, see “The Business Combination Proposal—Related Agreements—Series X Preference Shareholder Agreement.

Debt and Share Exchange

On March 8, 2021, the Company entered into an exchange transaction with Columbia River Investment Limited (“CRIL”), a former shareholder of the Company and former holder of two Convertible Notes. Pursuant to the exchange transaction, the Company repurchased CRIL’s two Convertible Notes (one issued under the 2018 NPA and one issued under the 2019 NPA) having an aggregate principal amount, together with accumulated interest, of $8,813,161 as well as CRIL’s Company Series A Preference Shares, Company Series B Preference Shares, and Company Series B-1 Preference Shares, in exchange for the Company Warrant to purchase an aggregate of 4,823,594 Company Series A Preference Shares, Company Series B Preference Shares, and Company Series B-1 Preference Shares (subject to adjustment as set forth therein) and the entering into the Columbia Loan having a principal amount of $40,089,033. Following such exchange transaction CRIL no longer holds any securities of the Company other than the Company Warrant. The Company Warrant entitles CRIL to purchase after the Closing the same number of PubCo Class A Ordinary Shares that CRIL would have been entitled to receive had such exchange transaction not occurred. The principal amount of the indebtedness owing by the Company under the Columbia Loan was determined based upon the aggregate purchase price paid by CRIL to purchase such securities from the Company. The Company Warrant may only be exercised in connection with CRIL’s intention to sell the exercised shares. Following the Closing, if the Company Warrant remains outstanding, (i) the Company Warrant will be adjusted in accordance with the terms thereof and will only be exercisable into PubCo Class A Ordinary Shares, and (ii) CRIL may not hold exercised PubCo Class A Ordinary Shares representing more than 1% of the total number of outstanding PubCo Ordinary Shares (which number may go up to 2% for a period that may not exceed several days as set forth in the Company Warrant). The Company Warrant shall be assumed by PubCo as part of the Transactions (referred to in this in this proxy statement/prospectus as the Assumed Company Warrant). The loan under the Columbia Loan becomes payable and shall be paid immediately after the Closing of the Transactions, upon which the Columbia Loan and the security interest granted thereunder will terminate.

As of September 30, 2021, the principal balance and accrued interest on the Company’s outstanding indebtedness was $125,110,096, which included $62,942,601 related to the Convertible Notes, $20,947,182 related to the Company Series X Preference Shares and $41,220,313 related to the Columbia Loan.

Executive Officers of PubCo

The executive officers of PubCo upon the Closing will be the executive officers of the Company immediately prior to the Closing.

Board of Directors of PubCo

Upon the Closing, the PubCo Board will consist of four directors, which will include Emiliano Kargieman, Ted Wang and Marcos Galperin. PubCo expects to appoint the remaining Board member prior to the Closing.

CF V’s Reasons for the Business Combination

CF V was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. CF V sought to do this by

 

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utilizing the networks and industry experience of both its management team and the CF V Board to identify, acquire and, after its initial business combination, help to build a company in an industry that complements the experience and expertise of its management team.

The CF V Board considered a variety of factors in connection with its evaluation of the Business Combination. In light of the complexity of those factors, the CF V Board, as a whole, did not consider it practicable to, nor did it attempt to, quantify or otherwise assign relative weights to the specific factors it took into account in reaching its decision. Individual members of the CF V Board may have given different weight to different factors. Certain information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Note Regarding Forward-Looking Statements.”

Before reaching its decision, the CF V Board reviewed the results of the due diligence conducted by its management, employees of Cantor and CF V’s advisors, which included:

 

   

meetings and calls with the management team and advisors of the Company regarding, among other things, operations, plans and forecasts;

 

   

review of material contracts and other material matters;

 

   

financial, tax, legal, insurance, accounting, operational, business and other due diligence;

 

   

virtual and in-person tours of the Company’s manufacturing facility in Montevideo, Uruguay and its office in Buenos Aires, Argentina;

 

   

consultation with CF V management and its legal counsel and financial advisor;

 

   

review of historical financial performance of the Company (including audited and unaudited financials) and the Company’s management projections for the Company’s business; and

 

   

financial and valuation analyses of the Company and the Business Combination.

In the prospectus for the IPO, CF V identified certain high level, non-exclusive investment criteria that CF V believed would be important in evaluating prospective target businesses. As it relates to the Company, the CF V Board determined that pursuing a potential business combination with the Company would be an attractive opportunity for CF V and its stockholders for a number of reasons, including, but not limited to, (1) the Company’s technological capabilities in the earth observation industry and the large potential addressable market providing for significant growth potential, (2) the belief that the Company has sustainable competitive advantages with respect to its technology, (3) the Company’s business model has the potential to generate significant free cash flows, (4) the Company has an experienced and capable management team, and (5) that the Company has the opportunity to grow successfully and become a leader in the earth observation industry.

In addition, based on its review of the industry data and the operational, financial and other relevant information related to the Company’s business provided by the Company and presented to the CF V Board, the factors considered by the CF V Board included, but were not limited to, the following:

 

   

Satellogic’s Position in the Small Satellite Earth Observation Industry. According to the Company and the report prepared by the consulting firm engaged by CF V, the Company is currently one of the leading companies in the small satellite earth observation industry. The Company believes it maintains a leading technological position in this new and growing industry, which is supported by information provided by the Company, the findings contained in the report prepared by the consulting firm and other materials CF V considered in assessing the sector.

 

   

Large and Growing Addressable Market. According to the Company’s estimates (supported by a Euroconsult report provided by the Company to CF V and referenced herein), the total addressable

 

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market for the earth observation industry is estimated to surpass $140 billion by 2024. The Company estimates that the market sizes for the various applications of its products are: (1) infrastructure—$16-18 billion; (2) energy—$38-50 billion; (3) natural resources—$6 billion; (4) food security and sustainability—$30 billion; (5) cartography / urban patterns—$55–65 billion; and (6) policy and government—$1 billion. As the small satellite earth observation industry and its use cases continue to gain acceptance in the marketplace, the market for small satellite earth observation is expected to increase considerably. As the Company expands its product offerings, the Company has the opportunity to expand its services to customers that do not currently use satellite data. Even if the Company is unable to make inroads in all the potential uses cases of its technology, it still has significant potential opportunity for its product offerings and services.

 

   

Satellogic’s Differentiated Technology. The Company is a vertically integrated company in the small satellite earth observation industry, which allows it to shorten its R&D cycles and continue to stay at the forefront of technological changes in its industry. In addition, the Company has patented optical technology that provides the Company with greater image capacity than its competitors. The Company also has an open aperture technology that allows for continuous data capture that will enable daily re-mapping once the full 300+ satellite constellation is deployed. Together with the Company’s technological advantages, the Company will also be able to provide imagery to additional customers at almost no marginal cost thereby substantially decreasing its data acquisition costs and maximizing its profit opportunities.

 

   

Satellogic’ Existing Operations. The Company has launched 17 satellites, including four launched as recently as June 30, 2021, all of which are operational. These existing satellites allow the Company to take images and video from space today and as the Company builds out its constellation with the proceeds of the Business Combination, the Company will be able to increase the frequency that it can visit each targeted location on Earth.

 

   

Satellogic’s Satellite Costs. The Company designed the construction of a satellite from the ground up, resulting in a satellite that is significantly smaller and lighter than those of its competitors. This decreased size, along with its vertical integration, has led to a significant reduction in cost to launch each satellite as compared to its competitors in the small satellite earth observation industry, which will allow the Company to deploy its constellation of satellites much cheaper and much quicker than its competitors.

 

   

Satellogic’s Business Plan. If the Company achieves its business plan of launching and maintaining a constellation of 300+ satellites, it will be capable of remapping the world at sub-meter resolution with daily revisits which is the frequency the Company believes is required to address certain commercial applications of satellite imagery.

 

   

Growth Potential of Satellogic’s Business. The Company has the potential for revenues to accelerate quickly as the technological use cases of the small satellite earth observation industry become increasingly present in different industries and as the participants in these industries expand their use of data available from satellites.

 

   

Experienced and Capable Management Team. Following completion of the Business Combination, the Company will continue to be led by the same senior management team as prior to the Business Combination, which management team has positioned the Company to benefit as the small satellite earth observation industry begins to move into the mass adoption phase.

 

   

Attractive Valuation. The CF V Board’s determination that if the Company is able to meet its financial projections, then CF V Stockholders will have acquired their shares in PubCo at an attractive valuation which would increase shareholder value.

 

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Other Alternatives. The CF V Board’s belief, after a thorough review of other business combination opportunities reasonably available to CF V, that the Business Combination represents an attractive potential business combination for CF V.

 

   

Terms and Conditions of the Merger Agreement. The terms and conditions of the Merger Agreement and the Business Combination (including the Merger), were, in the opinion of the CF V Board, the product of arm’s-length negotiations between the parties.

 

   

Continued Ownership by Holders of Company Shares and Convertible Notes. The CF V Board considered that the holders of Company Shares (other than the holder of the Company Warrant) (i) are not receiving any cash proceeds from the Business Combination, and (ii) will be significant shareholders of PubCo after Closing, with a large majority of holders of Company Shares entering into Lock-Up Agreements. In addition, more than 50% of the holders of Convertible Notes have agreed, as of the date hereof, to waive their redemption rights and convert their Convertible Notes into PubCo Ordinary Shares and continue as security holders of the Company.

 

   

Additional Investments. The CF V Board considered the fact that PIPE Investors, the Sponsor pursuant to the Amended and Restated Forward Purchase Contract, and the Company Shareholders that subscribed for Company Series X Preference Shares prior to the date of the Merger Agreement agreed to invest $100 million in the aggregate in the Company and PubCo, including the large investment by a PIPE Investor who agreed to a two-year lock-up in order to receive PubCo Warrants with a strike price of $20.00.

 

   

Satellogic Being an Attractive Target. The CF V Board considered the fact that the Company (i) is of a sufficient size relevant to the public marketplace, (ii) has an experienced existing management team, (iii) has a significant total addressable market and expansion opportunities, and (iv) would benefit from the consummation of the Business Combination by becoming a public company and receiving the net proceeds of the Business Combination, which the CF V Board believed would allow the Company to accelerate its business plan and improve the Company’s ability to meet its financial projections.

In the course of its deliberations, in addition to the various other risks associated with the business of the Company, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus, the CF V Board also considered a variety of uncertainties, risks and other potentially negative reasons relevant to the Business Combination, including the following:

 

   

Macroeconomic Risks Generally. Macroeconomic uncertainty, including the potential impact of the COVID-19 pandemic, and the effects they could have on PubCo’s revenues and financial performance.

 

   

Macroeconomic Risks in the Small Satellite Earth Observation Industry. The small satellite earth observation industry is a nascent industry that is still in its development phase. The Company will be one of three companies in this space to undergo a business combination with a special purpose acquisition company and none of the participants in the industry are currently profitable. In addition, as noted by the consultant engaged by CF V, the expansion and entry into the mainstream of this industry has been delayed over the last few years as each company in the space has failed to meet projections over the last few years. The Company will face significant competition from its competitors and may not win as many customers bids as expected, thereby negatively impacting PubCo’s revenues and financial performance.

 

   

Risks in Satellogic Business Plan. While the Company is a technological leader in the small satellite earth observation industry and believes it is the only company in the high resolution earth observation industry planning to have daily revisits at sub-meter resolution, the Company’s business plan relies on substantial adoption of its technology by customers and expanded use cases of satellite date, which may not be achieved on its projected timeline or at all, which would negatively impact the Company’s ability to timely meet its financial projections.

 

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Business Plan and Projections May Not be Achieved. The risk that the Company may not be able to execute on its business plan on time or at all, or build out its constellation of satellites at its projected cost, and realize the financial performance as set forth in the financial projections presented to management of CF V and the CF V Board, and the risk that the Company may need to raise additional capital to achieve its business plan.

 

   

Satellogic Salesforce. While the Company has a robust pipeline of potential customer opportunities, there is no guarantee the Company will be able to enter into contracts with the number of customers that it projects or that sales contracts will be renewed. The Company currently only has one customer. To achieve its financial projections, the Company will need to continue to successfully expand and build out its salesforce, which may not be successfully achieved.

 

   

Total Addressable Market. While the Euroconsult report reviewed and relied upon by the Company reflects a more than $140 billion total addressable market, the consultant engaged by CF V believes that the total addressable market for the Company is in the $28-38 billion range as a number of use cases in the larger TAM use data from sources other than satellites which are unlikely to be replaced by satellites in the near term and require the Company to expands its services and create new markets for satellite imagery. However, even this smaller TAM provides the Company with significant market opportunity.

 

   

Patent Risks. The risk that the Company could be subject to patent infringement suits, including suits as the Company shifts launch operations into the United States. These third-party patent risks may be enhanced by U.S. government secrecy orders that may have been issued on third-party satellite imaging patents, which could someday subject the Company to patent infringement liability, or affect the validity of the Company’s patents, after the secrecy orders are removed.

 

   

Intense Competition. Competition in the earth observation industry is intense with both large, established and better capitalized competitors as well as newer competitors in the emerging small satellite market. Competitors may offer products and services on terms that the Company is unwilling or unable to match.

 

   

Dilution from the Equity Incentive Plan. Pursuant to the Equity Incentive Plan, Class A Ordinary Shares equal to ten percent (10%) of the number of shares outstanding upon Closing will be available for issuance to directors, officers and employees of PubCo and its subsidiaries after Closing.

 

   

Shares Available for Sale / Lock-Ups. The PubCo Class A Ordinary Shares issued to the investors in the PIPE Investment are not subject to any lock-ups, and PubCo is required to register such PubCo Class A Ordinary Shares promptly after Closing. At least 85% of the PubCo Ordinary Shares issued to holders of Company Shares and Convertible Notes will be subject to a lock-up between 6 and 12 months (with the 12-month lock-up subject to early release as described herein) and the PubCo Class A Ordinary Shares issued to the Sponsor and CF V’s other initial stockholders in exchange for their Founder Shares will be subject to a 12 month lock-up (subject to early release as described herein). Upon the expiration of any such lock-up and, if applicable, upon the registration of such PubCo Ordinary Shares, a substantial number of PubCo Ordinary Shares may become available for sale, which could have a negative impact on PubCo’s stock price.

 

   

No Fairness Opinion. The risk that CF V did not obtain a fairness opinion in connection with the Business Combination.

 

   

Liquidation. The risks and costs to CF V if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in CF V being unable to effect a business combination within the completion window which would require CF V to liquidate.

 

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Stockholder Vote and Other Actions. The risk that CF V Stockholders may object to and challenge the Business Combination and take action that may prevent or delay the Closing, including to vote down the Proposals at the Special Meeting or redeem their shares of CF V Class A Common Stock.

 

   

Closing Conditions. The fact that completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within CF V’s control.

 

   

CF V’s Stockholders Holding a Minority Position in the Post-Combination Company. The fact that existing CF V Stockholders will hold a minority position in PubCo following completion of the Business Combination, with existing CF V Stockholders (other than the Sponsor Related Parties) owning approximately 22.1% of PubCo after Closing, assuming that no shares of CF V Class A Common Stock are redeemed by CF V Stockholders and excluding PubCo Class A Ordinary Shares underlying warrants, and subject to the other assumptions described in this proxy statement/prospectus. For more information, see “Questions and Answers About the Proposals—What equity stake will holders of CF V Public Shares, holders of Company Shares, the Sponsor Related Parties, and the PIPE Investors hold in PubCo upon completion of the Business Combination. In addition, the Company’s chief executive officer will hold high voting shares that will not convert into PubCo Class A Ordinary Shares until 5 years after closing of the Transactions. During this time, the Company’s chief executive officer will control all decisions of PubCo.

 

   

Terms of the PIPE Investment. The fact that the PIPE Subscription Agreements, Amended and Restated Forward Purchase Contract and Series X Preference Share Agreement contain terms that, among other things, provide downside market protection to the PIPE Investors, Sponsor and holders of Series X Preference Shares that are not provided to holders of the CF V Public Shares and the fact that these terms, so long as the other conditions set forth in the CF V Warrant Agreement are triggered, could result in a downward adjustment to the exercise price and redemption price of the CF V Warrants pursuant to the CF Warrant Agreement.

 

   

Litigation. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

 

   

Fees and Expenses. The fees and expenses associated with completing the Business Combination.

 

   

Redemptions. The risk that holders of CF V Public Shares would exercise their redemption rights, thereby depleting the amount of cash available in the Trust Account.

 

   

The Trading Market Listing. The potential inability to maintain the listing of PubCo’s securities on the Trading Market following the Closing.

 

   

Valuation. The risk that the CF V Board may not have properly valued the Company’s business.

 

   

Distraction to Operations. The risk that the potential diversion of the Company’s management and employee attention as a result of the Business Combination may adversely affect the Company’s operations.

 

   

Readiness to be a Public Company; Compliance Infrastructure. As the Company has not previously been a public company and the majority of its executives and employees are located outside the United States, the Company may not have all the different types of employees necessary for it to timely and accurately prepare reports for filing with the SEC. There is a risk that the Company will not be able to hire the right people to fill in these gaps by the time of the Closing or that additional issues could arise after the Closing due to its failure to have hired these people in advance of Closing. In addition, as the Company increases its sales activities and expands into the U.S. and other jurisdictions, its compliance infrastructure more generally may not be able to keep pace with the increased compliance risks presented by rapid growth.

 

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In addition to considering the factors described above, the CF V Board also considered that:

 

   

Interests of Certain Persons. The Sponsor and certain officers and directors of CF V may have interests in the Business Combination as individuals that are in addition to, and that may be different from, the interests of CF V Stockholders (see section entitled “The Business Combination Proposal—Interests of the Sponsor and CF V’s Directors and Officers in the Business Combination”). CF V’s independent directors on the CF V Audit Committee reviewed and considered these interests during the negotiation of the Business Combination and in evaluating and unanimously approving, as members of the CF V Audit Committee, the Merger Agreement and the transactions contemplated therein.

After considering the foregoing, the CF V Board concluded, in its business judgment, that the potential benefits to CF V and its stockholders relating to the Business Combination outweighed the potentially negative factors and risks relating to the Business Combination.

Organizational Structure

The following diagram illustrates the transaction structure of the Business Combination and the organizational structure of the parties thereto prior to Closing.

 

 

LOGO

 

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The following diagram illustrates the organizational structure of PubCo upon consummation of the Business Combination.

 

 

LOGO

It is anticipated that, upon the completion of the Business Combination:

 

   

CF V Stockholders (other than the Sponsor Related Parties) will own approximately 22.1% of the outstanding PubCo Ordinary Shares,

 

   

the Company’s existing securityholders (including the holders of the Company Series X Preference Shares and the Convertible Notes) will own approximately 66.3% of the outstanding PubCo Ordinary Shares,

 

   

the Sponsor Related Parties, through their ownership of CF V Common Stock on the date hereof and through the Sponsor’s participation in the PIPE Investment and the Amended and Restated Forward Purchase Contract, will own approximately 7.5% of the outstanding PubCo Ordinary Shares, and

 

   

the PIPE Investors (other than the Sponsor), through their participation in the PIPE Investment, will own approximately 4.1% of the outstanding PubCo Ordinary Shares.

The ownership percentages with respect to PubCo following the Business Combination are based upon the number of Company Shares and shares of CF V Common Stock issued and outstanding as of September 30, 2021 and are subject to a number of assumptions. These relative percentages assume (i) all holders of Convertible Notes convert their Convertible Notes into Company Shares at Closing, (ii) all holders of Company Series X Preference Shares convert their Company Series X Preference Shares into PubCo Class A Ordinary Shares in accordance with the Series X Shareholder Agreement, (iii) all Company Options are exercised prior to Closing, (iv) the Company Warrant is exercised prior to Closing, (v) no Aggregate Forfeiture Shares will be forfeited by the Sponsor, the Company Shareholders or holders of Convertible Notes and no Additional Shares will be issued pursuant to the PIPE Subscription Agreements, the Series X Shareholder Agreement, or the Amended and Restated Forward Purchase Contract, (vi) none of the Sponsor Earn-Out Shares vest, (vii) no exercise of CF V

 

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Warrants or PIPE Warrants, (viii) no Company Shareholder exercises its rights of appraisal, and (ix) no CF V Stockholders exercise redemption rights in connection with their CF V Public Shares. If any redemption rights are exercised in respect of CF V Public Shares, or any of the other assumptions are not correct, these percentages will be different.

Please see “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

In addition, future issuances of PubCo Ordinary Shares, including under the Equity Incentive Plan, or the vesting of any Earn-Out Shares pursuant to the Sponsor Support Agreement, would dilute current stockholders’ ownership percentage. See “Risk Factors—Risks Related to CF V and the Business Combination—Upon consummation of the Business Combination, CF V’s public stockholders will experience dilution as a consequence of, among other transactions, the issuance of PubCo Ordinary Shares by PubCo as consideration in the Business Combination and in connection with the PIPE Investment (including any PIPE Warrants), as well to the Company Warrant that may be held by a former shareholder of the Company and under the Equity Incentive Plan. Having a minority share position may reduce the influence that CF V’s current stockholders have on the management of PubCo”.

The Company Warrant is currently exercisable for an aggregate of 4,823,594 Company Series A Preference Shares, Company Series B Preference Shares, and Company Series B-1 Preference Shares. At the Closing, the Company Warrant shall instead become exercisable for such number of PubCo Class A Ordinary Shares into which such Company Preference Shares would have converted into had such Company Preference Shares been held by the holder of the Company Warrant immediately prior to the Closing.

In connection with the Business Combination, each Company Series X Preference Share shall convert into such number of PubCo Class A Ordinary Shares equal to (x) $10.00 plus all accrued and unpaid dividends (at an annual rate of 7%), divided by $10.00 (rounded to the nearest whole PubCo Class A Ordinary Share), and subject to the potential receipt of Series X Additional Shares as described in the section titled “The Business Combination Proposal—Related Agreements—Series X Preference Shareholder Agreement” below.

Prior to the Initial Merger Effective Time and in connection with the consummation of the Business Combination, the Company is required to take all appropriate action to cause all Convertible Notes to automatically convert prior to Initial Merger Effective Time into a number of Company Preference Shares in accordance with the section titled “—Convertible Notes Conversion” below. As of the date hereof, of the $56,587,000 Convertible Notes current principal amount outstanding, holders of $33,587,000 in Convertible Notes have agreed to convert their Convertible Notes at Closing.

The following table presents the share ownership of various holders of PubCo Ordinary Shares upon the Closing and is based on (i) the assumptions set forth above, (ii) a Closing Date of September 30, 2021, (iii) no additional equity securities of CF V being issued at or prior to Closing, and (iv) the following redemption scenarios:

No Redemptions: This scenario assumes that no CF V Stockholders exercise redemption rights in connection with the approval of the Business Combination with respect to their CF V Public Shares.

50% of Maximum Redemptions: This scenario assumes that CF V Stockholders exercise redemption rights with respect to approximately 6,250,000 CF V Public Shares (25% of the issued, outstanding and unredeemed CF V Public Shares) in connection with the approval of the Business Combination, at a price of $10.00 per share.

Maximum Redemptions: This scenario assumes that CF V Stockholders exercise redemption rights with respect to approximately 12,500,000 CF V Public Shares (50% of the issued, outstanding and unredeemed CF V Public

 

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Shares) in connection with the approval of the Business Combination, at a price of $10.00 per share. This maximum redemption scenario reflects the maximum number of shares of CF V Class A Common Stock that may be redeemed and still allow CF V to meet the Minimum Cash Amount. Assuming this maximum redemption scenario and a price of $10.00 per CF V Public Share, PubCo is expected to have a public float of approximately $125.0 million.

 

     No Redemption     50% of Maximum
Redemptions
    Maximum Redemption  

Shareholders of
PubCo Post Business
Combination(6)

   Number
of PubCo
Ordinary
Shares
     % of
Total(1)
    Number
of PubCo
Ordinary
Shares
     % of
Total(1)
    Number
of PubCo
Ordinary
Shares
     % of
Total(1)
 

CF V Stockholders (other than the Sponsor Related Parties)(2)

     25,000,000        22.1     18,750,000        17.5     12,500,000        12.4

Company securityholders

     75,198,005        66.3     75,198,005        70.2     75,198,005        74.5

Sponsor Related Parties(2)(3)

     8,547,770        7.5     8,547,770        8.0     8,547,770        8.5

PIPE Investors(4)(5)

     4,650,000        4.1     4,650,000        4.3     4,650,000        4.6
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

     113,395,775        100.0     107,145,775        100.0     100,895,775        100.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Approximate percentage of total outstanding PubCo Ordinary Shares following the Closing.

(2)

Excludes 8,333,333 PubCo Warrants being issued in exchange for an equal number of CF V public warrants in connection with the Business Combination.

(3)

Excludes 200,000 PubCo Warrants being issued in exchange for an equal number of CF V private placement warrants in connection with the Business Combination.

(4)

Excludes 333,333 PubCo Warrants being issued as part of the Amended and Restated Forward Purchase Contract.

(5)

Excludes 2,500,000 PIPE Warrants issued in connection with the execution of the Lock-Up Addendum to the PIPE Subscription Agreement.

(6)

Shares are illustrative as of September 30, 2021 and subject the change over time due to certain conversion features related to the Warrant and Series X Preference Shares.

Date, Time and Place of Special Meeting

The Special Meeting will be held at                  Eastern time, on                 , 2021, as a virtual meeting. The meeting will be held virtually over the internet by means of a live audio webcast. You will be able to attend, vote your shares and submit questions during the Special Meeting via a live webcast available at                 .

Record Date; Outstanding Shares of CF V Common Stock and CF V Warrants; CF V Stockholders and CF V Warrant Holders Entitled to Vote

CF V has fixed the close of business on                 , 2021, as the Record Date for determining the CF V Stockholders entitled to notice of and to attend and vote at the Special Meeting.

As of the close of business on the Record Date there were 31,850,000 shares of CF V Common Stock outstanding and entitled to vote, consisting of 25,600,000 shares of CF V Class A Common Stock (consisting of 25,000,000 CF V Public Shares and 600,000 CF V Placement Shares) and 6,250,000 shares of CF V Class B Common Stock, and 8,533,333 CF V Warrants, consisting of 8,333,333 CF V Public Warrants and 200,000 CF V Placement Warrants.

Each share of CF V Common Stock is entitled to one vote per share at the Special Meeting. CF V Warrants have no voting rights at the Special Meeting. The Sponsor and CF V’s officers and directors own an aggregate of 6,850,000 shares of CF V Common Stock entitled to vote at the Special Meeting.

 

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Quorum and Required Vote for CF V Stockholder Proposals

A quorum of CF V Stockholders is necessary to hold a valid meeting. A quorum will be present at the Special Meeting if a majority of the shares of CF V Common Stock issued and outstanding and entitled to vote at the Special Meeting is present via the virtual meeting platform or represented by proxy at the Special Meeting. Abstentions will count as present for the purposes of establishing a quorum. Broker non-votes will not be counted for purposes of establishing a quorum.

The approval of the Business Combination Proposal requires the affirmative vote of a majority of the issued and outstanding shares of CF V Common Stock as of the Record Date. Accordingly, a CF V Stockholder’s failure to vote by proxy or to vote at the Special Meeting or an abstention will have the same effect as a vote “AGAINST” the Business Combination Proposal.

The approval of the Adjournment Proposal requires the affirmative vote of the holders of a majority of the shares of CF V Common Stock cast by the stockholders present via the virtual meeting platform or represented by proxy and entitled to vote thereon at the Special Meeting. A CF V Stockholder’s failure to vote by proxy or to vote via the virtual meeting platform at the Special Meeting or an abstention will have no effect on the outcome of the vote on the Adjournment Proposal.

It is important for you to note that in the event that the Business Combination Proposal does not receive the requisite vote for approval, we will not then consummate the Business Combination. If CF V does not consummate the Business Combination and fails to complete an initial business combination by February 2, 2023 (or a later date approved by CF V Stockholders pursuant to the CF V Charter), CF V will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to its public stockholders in accordance with the CF V Charter, subject to payment of CF V’s tax obligations and up to $100,000 of dissolution expenses.

Proxy Solicitation

Proxies may be solicited by telephone, by facsimile, by mail, on the Internet or in person. CF V has engaged Morrow Sodali LLC to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its shares via the virtual meeting platform if it revokes its proxy before the Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section titled “Special Meeting of CF V Stockholders—Revoking Your Proxy.”

Redemption Rights

Under the CF V Charter, holders of CF V Class A Common Stock may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account as of two (2) business days prior to the Closing, including interest (which interest shall be net of taxes payable), by (b) the total number of the then-issued and outstanding shares of CF V Class A Common Stock; provided that CF V will not redeem any CF V Public Shares to the extent that such redemption would result in CF V having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. As of September 30, 2021, this would have amounted to $10.00 per share. Holders of CF V Class A Common Stock on or before                     , 2021 (two business before the Special Meeting) may exercise redemption rights whether or not they are holders as of the Record Date and whether or not such shares are voted at the Special Meeting. However, under the CF V Charter, in connection with an initial business combination, a CF V public stockholder, together with any affiliate or any other person with whom such stockholder is acting in concert of as a “group” (as defined under Section 13(d)(3) of the Exchange Act), is restricted from seeking redemption rights with respect to more than 15% of the CF V Public Shares.

 

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If a holder exercises its redemption rights, then such holder will be exchanging its shares of CF V Class A Common Stock for cash and will no longer own shares of CF V Class A Common Stock and will not receive PubCo Ordinary Shares in connection with the Business Combination. Such a holder will be entitled to receive cash for its CF V Public Shares only if it properly demands redemption and delivers its shares (either physically or electronically) to CF V’s transfer agent in accordance with the procedures described herein. See the section titled “Special Meeting of CF V Stockholders—Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash. A stockholder holding both CF V Public Shares and CF V Public Warrants may redeem its CF V Public Shares but retain the CF V Public Warrants, which if the Business Combination closes, will be exchanged for PubCo Warrants.

In connection with the IPO, the Sponsor and CF V’s officers and directors agreed to waive any redemption rights with respect to any shares of CF V Common Stock held by them in connection with the completion of the Business Combination. Such waivers are standard in transactions of this type and the Sponsor and CF V’s officers and directors did not receive separate consideration for the waiver.

Interests of the Sponsor and CF V’s Directors and Officers in the Business Combination

The Sponsor and CF V’s directors and officers have interests in the Business Combination that are different from or in addition to (and which may conflict with) the interests of CF V Stockholders. These interests include, among other things:

 

   

CF V’s Existing Charter provides that the doctrine of corporate opportunity will not apply with respect to any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, except as set forth in the Existing Charter. CF V does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, CF V’s officers and directors may become aware of other investment and business opportunities which may be appropriate for presentation to CF V as well as the other entities with which they are affiliated. CF V’s management has pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any pre-existing fiduciary obligation will be presented the opportunity before CF V is presented with it;

 

   

unless CF V consummates an initial business combination, CF V’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them on behalf of CF V (no such expenses were incurred that had not been reimbursed as of September 30, 2021) to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;

 

   

the CF V Placement Units, including the CF V Placement Shares, and CF V Placement Warrants, purchased by the Sponsor for $6.0 million will be worthless if a business combination is not consummated;

 

   

the Sponsor has agreed that the CF V Placement Units, and all of their underlying securities, will not be sold or transferred by it until 30 days after CF V has completed a business combination, subject to limited exceptions;

 

   

the fact that Sponsor paid $25,000 or approximately $0.003 per share for the Founders Shares (of which it currently holds 6,230,000), which such Founder Shares, if unrestricted and freely tradeable, would be valued at approximately $61.7 million, based on the closing price of CF V Class A Common Stock on October 11, 2021, and that such shares will be worthless if a business combination is not consummated and that the Sponsor and its affiliates can earn a positive rate of return on their investment even if CF V’s public stockholders experience a negative return following the consummation of the Business Combination;

 

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the fact that Sponsor has agreed not to redeem any of the Founders Shares or CF V Placement Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

   

if CF V does not complete an initial business combination by February 2, 2023 (or a later date approved by CF V Stockholders pursuant to the CF V Charter), the proceeds from the sale of the CF V Placement Units of $6.0 million will be included in the liquidating distribution to CF V’s public stockholders and the CF V Placement Warrants will expire worthless;

 

   

the fact that upon completion of the Business Combination, a business combination marketing fee of $8.75 million, $5.0 million of M&A advisory fees (which will be $8.0 million if the Available Cash at Closing exceeds $295.0 million), and approximately $2.2 million of placement agent fees will be payable to CF&Co., an affiliate of CF V and the Sponsor;

 

   

if the Trust Account is liquidated, including in the event CF V is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify CF V to ensure that the proceeds in the Trust Account are not reduced below $10.00 per CF V Public Share by the claims of prospective target businesses with which CF V has entered into an acquisition agreement or claims of any third party for services rendered or products sold to CF V, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that the Sponsor has agreed to invest up to an aggregate of up to $23.2 million in the PIPE Investment on the same terms as the PIPE Investors;

 

   

as further described in the section entitled “Certain Relationships and Related Person Transactions—The Company—Financing Engagement Letter”, the Company has engaged CF&Co. to assist it with any debt financings contemplated by the Company and agreed to pay CF&Co. fees in connection with those debt financings, which debt financings may be sought prior to or following the consummation of the proposed Business Combination;

 

   

the fact that in connection with the IPO, the Sponsor agreed, upon closing of CF V’s initial business combination, to invest $10.0 million in exchange for the Forward Purchase Securities (comprised of 1,250,000 PubCo Class A Ordinary Shares and 333,333 PubCo Warrants), which, assuming a $10 share price and a $1.50 warrant price, would represent a discount of approximately 23% to the price being paid by the PIPE Investors for the PIPE Shares being issued;

 

   

the fact that the Sponsor, through its participation in the PIPE Investment and purchase of Forward Purchase Securities, will be entitled to receive PIPE Additional Shares and FPC Additional Shares if the Adjustment Period VWAP is less than $10.00 (up to a maximum of 579,193 PIPE Additional Shares and 250,000 FPC Additional Shares if the Adjustment Period VWAP is less than $8.00), in which case, the Sponsor would also forfeit 143,376 PubCo Ordinary Shares received in exchange for its Founder Shares pursuant to the Merger Agreement (in which case the Sponsor will have a right to earn back a number of PubCo Ordinary Shares equal to such forfeited shares). Based on the closing price of CF V Class A Common Stock on September 30, 2021, 33,503 Additional Shares would be issued to the Sponsor;

 

   

the fact that the Sponsor has made outstanding loans to CF V in the aggregate amount of $1,197,223 as of September 30, 2021, which amount the Sponsor will lose to the extent that CF V is unable to repay such loans if the amount of such loans exceed the amount of available proceeds not deposited in the Trust Account if an initial business combination is not completed;

 

   

the fact that CF V’s two independent directors own an aggregate of 20,000 Founder Shares that were transferred by the Sponsor at no cost, which if unrestricted and freely tradeable would be valued at $198,200, based on the closing price of CF V Class A Common Stock on October 11, 2021; and

 

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the fact that CF V’s existing officers and directors will be eligible for continued indemnification and continued coverage under a directors’ and officers’ liability insurance policy after the business combination and pursuant to the Merger Agreement.

The existence of the interests described above may result in a conflict of interest on the part of CF V’s officers and directors in entering into the Merger Agreement and making their recommendation that you vote in favor of the approval of the Business Combination. In particular, the existence of the interests described above may incentivize CF V’s officers and directors to complete an initial business combination, even if on terms less favorable to CF V’s stockholders compared to liquidating CF V, because, among other things, if CF V is liquidated without completing an initial business combination, the Sponsor’s Founder Shares and CF V Placement Units would be worthless (which, if unrestricted and freely tradable, would be worth an aggregate of approximately $67.9 million based on the closing price of CF V Class A Common Stock and CF V Units on October 11, 2021), out-of-pocket expenses advanced by the Sponsor and loans made by the Sponsor to CF V would not be repaid to the extent such amounts exceed cash held by CF V outside of the Trust Account (which such expenses and loans, as of September 30, 2021, amounted to $1,197,223), and CF&Co. would not receive business combination marketing fees, M&A advisory fees and placement agent fees amounting to $15.95 million, in the aggregate.

Interests of the Company’s Directors and Officers in the Business Combination

In considering the recommendation of the CF V Board to vote in favor of the approval of the Business Combination Proposal, you should keep in mind that certain members of the Company Board and executive officers of the Company have interests in the Business Combination Proposal that are different from, or in addition to, those of CF V Stockholders and of the Company Shareholders. In particular:

 

   

Continuing Officers and Directors. Certain of the Company’s directors and executive officers are expected to become directors and/or executive officers of PubCo upon the completion of the Business Combination. Specifically, the following individuals who are currently executive officers of the Company are expected to become executive officers of PubCo upon the completion of the Business Combination, serving in the offices set forth opposite their names below:

 

Emiliano Kargieman

  

        Chief Executive Officer

Rick Dunn

  

        Chief Financial Officer

Aviv Cohen

  

        Chief Operations Officer

Gerardo Richarte

  

        Chief Technology Officer and Chief Information Security Officer

Rebeca Brandys

  

        General Counsel

In addition, the following individuals who are currently directors of the Company are expected to become members of the PubCo Board upon completion of the Business Combination: Emiliano Kargieman, Ted Wang and Marcos Galperin.

Recommendation to Stockholders

The CF V Board believes that the Proposals to be presented at the Special Meeting are in the best interests of CF V and its stockholders and unanimously recommends that CF V Stockholders vote “FOR” each of the Proposals.

For more information about the CF V Board’s recommendation and the proposals, see the sections titled “Special Meeting of CF V Stockholders—Recommendation of the CF V Board” beginning on page 133 and “The Business Combination Proposal—CF V Board’s Reasons for Approval of the Business Combination” beginning on page 165.

 

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Appraisal/Dissenters’ Rights

CF V Stockholders do not have appraisal rights in connection with the Proposals, including the Business Combination Proposal.

Company Shareholders are entitled to dissent from the Initial Merger which forms part of the Business Combination and to receive payment of the “fair value” of their shares determined in accordance with the laws of the BVI following consummation of the Initial Merger. Where a Company Shareholder who exercises such dissent rights and the Company are unable to agree on the “fair value” of such shares, a statutory appraisal process is required to determine the “fair value.”

Sources and Uses of Funds for the Business Combination

The following table summarizes the sources and uses for funding the Business Combination, calculated as of September 30, 2021. These figures assume that no CF V Stockholders exercise their redemption rights and that no Company Shareholders exercise their appraisal rights in connection with the Business Combination.

 

Sources (in millions)

    

Uses (in millions)

Cash and investments held in the Trust Account

   $ 250.0     

Transaction expenses

   $  39.0

PIPE Investment(1)

   $ 69.7     

Debt Repayment

   $  41.2

Forward Purchase Amount

   $ 10.0     

Cash to Balance Sheet

   $249.5  
  

 

 

       

 

Total Sources

   $ 329.7     

Total Uses

   $329.7  
  

 

 

       

 

 

(1)

Excludes the Company Series X Preference Shares. At Closing, the Company Series X Preference Shares will be converted into PubCo Class A Ordinary Shares. See the subsection titled “Series X Preference Shareholder Agreement”.

Expected Accounting Treatment

The Business Combination will be accounted for as a capital reorganization under IFRS. See the subsection titled “The Business Combination—Expected Accounting Treatment of the Business Combination.”

Regulatory Approvals

The Business Combination is not subject to any regulatory requirement or approval, except for (i) filings with the State of Delaware and the Registrar of Corporate Affairs of the BVI, (ii) filings required with the SEC pursuant to the reporting requirements applicable to CF V, and the requirements of the Securities Act and the Exchange Act to disseminate this proxy statement to CF V Stockholders and (iii) filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) in connection with the Business Combination and the expiration or termination of any applicable waiting period, or any extension thereof, under the HSR Act.

Under the HSR Act and the rules and regulations promulgated thereunder by the U.S. Federal Trade Commission (the “FTC”), the Business Combination cannot be consummated until notifications have been given and certain information has been furnished to the FTC and the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”), and certain waiting period requirements have been satisfied. A transaction notifiable under the HSR Act may not be completed until the expiration of a 30-calendar day waiting period following the parties’ filing of their respective HSR Act notification forms or the early termination of that waiting period. On July 29, 2021, CF V and the Company each filed their respective Pre-Merger Notification and Report Form pursuant to the HSR Act with the Antitrust Division and the FTC. The waiting period under the HSR Act expired on August 30, 2021.

 

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SUMMARY RISK FACTORS

The consummation of the Business Combination and the business and financial condition of PubCo subsequent to Closing are subject to numerous risks and uncertainties, including those highlighted in the section title “Risk Factors” of this proxy statement/prospectus. The occurrence of one or more of the events or circumstances described below, alone or in combination with other events or circumstances, may adversely affect CF V’s ability to effect a business combination, and may have an adverse effect on the business, cash flows, financial condition and results of operations of CF V and the Company prior to the Business Combination and that of PubCo subsequent to the Business Combination. Such risks include, but are not limited to:

 

   

The Sponsor and each of CF V’s officers and directors have agreed to vote in favor of the Business Combination, regardless of how CF V’s public stockholders vote;

 

   

Neither the CF V Board nor any committee thereof obtained a fairness opinion in determining whether or not to pursue the Business Combination;

 

   

Since the Sponsor and CF V’s officers and directors have interests that are different, or in addition to (and which may conflict with), the interests of CF V Stockholders, a conflict of interest may have existed in determining whether the Business Combination is appropriate as CF V’s initial business combination. Such interests include that the Sponsor will lose its entire investment in CF V if a business combination is not completed;

 

   

The exercise of the CF V Board’s discretion in agreeing to changes or waivers in the terms of the Merger Agreement and related agreements, including Closing conditions, may result in a conflict of interest when determining whether such changes to the terms or waivers of conditions are appropriate and in CF V Stockholders’ best interest;

 

   

Subsequent to consummation of the Business Combination, PubCo may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on PubCo’s financial condition, results of operations and the price of its securities, which could cause you to lose some or all of your investment;

 

   

The historical financial results of the Company and unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what the Company’s actual financial position or results of operations would have been if it were a public company;

 

   

The Merger Agreement contains a minimum cash requirement for CF V. This requirement may make it more difficult for CF V to complete the Business Combination as contemplated;

 

   

The Sponsor or CF V’s or the Company’s respective directors, officers, advisors or respective affiliates may elect to purchase shares of CF V Class A Common Stock from public stockholders prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of the CF V Class A Common Stock;

 

   

CF V Stockholders may be held liable for claims by third parties against CF V to the extent of distributions received by them upon redemption of their CF V Public Shares.

 

   

Public stockholders of CF V who wish to redeem their CF V Public Shares for a pro rata portion of the Trust Account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If CF V Stockholders fail to comply with the redemption requirements specified in this proxy statement/prospectus, they will not be entitled to redeem their CF V Public Shares for a pro rata portion of the funds held in the Trust Account;

 

   

The Company is an early stage company that has not demonstrated a sustained ability to generate revenues. If it does not generate revenue as expected, its financial condition will be materially and adversely affected;

 

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The Company may experience difficulties in managing its growth and expanding its operations;

 

   

The success of the Company’s business will be highly dependent on its ability to effectively market and sell its EO services and to convert contracted revenues and its pipeline of potential contracts into actual revenues, which can be a costly process;

 

   

The Company may face risks and uncertainties associated with defense-related contracts, which may have a material adverse effect on its business;

 

   

If the Company is unable to scale production of its satellites as planned, its business and results of operations could be adversely affected;

 

   

The Company is dependent on third parties to transport and launch its satellites into space and any delay could have a material adverse impact on its business, financial condition, and results of operations;

 

   

The market may not accept the Company’s geospatial intelligence, imagery and related data analytic products and services, and its business is dependent upon its ability to keep pace with the latest technological changes;

 

   

The Company’s ability to grow its business depends on the successful production, launch, commissioning and/or operation of its satellites and related ground systems, software and analytic technologies, which is subject to many uncertainties, some of which are beyond its control;

 

   

The market for geospatial intelligence, imagery and related data analytics has not been established with precision, is still emerging and may not achieve the growth potential the Company expects or may grow more slowly than expected;

 

   

If the Company’s satellites fail to operate as intended, it could have a material adverse effect on its business, financial condition and results of operations;

 

   

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

 

   

The other matters described in the section titled “Risk Factors” beginning on page 63.

 

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SELECTED HISTORICAL FINANCIAL INFORMATION AND OPERATING DATA OF THE COMPANY

The information presented below is derived from the Company’s unaudited consolidated financial statements and audited consolidated financial statements included elsewhere in this proxy statement/prospectus as of and for the six months ended June 30, 2021 and 2020 and the fiscal years ended December 31, 2020 and 2019, respectively. The information presented below should be read alongside the Company’s consolidated financial statements and accompanying footnotes included elsewhere in this proxy statement/prospectus. You should read the following financial data together with “Risk Factors,” and “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

The following table highlights key measures of the Company’s financial condition and results of operations:

 

     Six Months Ended
June 30,
    Year Ended
December 31,
 
(amounts in USD)    2021     2020     2020     2019  
     (Unaudited)     (Unaudited)              

Statement of Profit or Loss Data

        

Revenue from contracts with customers

     1,706,275       —         —         —    

Cost of sales

     (1,250,848 )      —         —         —    

Other operating income

     —         —         22,394       126,375  

Administrative expenses

     (8,680,245 )      (3,268,803 )      (8,127,496     (4,323,365

Depreciation of satellites and other property and equipment

     (5,126,498 )      (842,630 )      (3,182,011     (4,238,444

Other operating expenses

     (8,502,173 )      (5,296,151 )      (11,376,667     (12,261,764

Operating loss

     (21,853,489 )      (9,407,584 )      (22,663,780     (20,697,198

Finance costs, net

     (5,476,371 )      (3,584,512 )      (7,487,211     (4,103,004

Other financial income (expense)

     249,984       183,047       596,628       (112,001

Gain on extinguishment of debt

     3,575,773       —         —         —    

Embedded derivative income (expense)

     (26,424,890     567,000       (84,223,586     4,230,000  

Loss before income tax

     (49,928,993     (12,242,049     (113,777,949     (20,682,203

Income tax expense

     (220,206     (78,243     (147,866     (83,150
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss for the year

     (50,149,199     (12,320,292     (113,925,815     (20,765,353
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic and diluted net loss per share

     (10.06     (2.55     (23.47     (4.30

Statement of Cash Flows Data

        

Net cash flows used in operating activities

     (11,682,658     (7,144,423     (17,330,311     (14,070,002

Net cash flows used in investing activities

     (3,485,225     (11,274,741     (9,245,106     (8,300,608

Net cash flows from financing activities

     20,403,495       2,825,620       17,780,113       27,016,353  

Statement of Financial Position Data

        

Total assets

     59,876,179       54,618,079       54,618,079       47,940,243  

Total liabilities

     231,223,343       171,905,251       171,905,251       53,388,436  

Total equity (deficit)

     (171,347,164     (117,287,172     (117,287,172     (5,448,193

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF CF V

The following table sets forth selected historical financial information derived from CF V’s unaudited financial statements as of June 30, 2021 and for the quarters ended June 30, 2021 and 2020 included elsewhere in this proxy statement/prospectus. You should read the following selected financial data in conjunction with “CF V’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and the related notes appearing elsewhere in this proxy statement/prospectus.

Balance Sheets

 

     June 30,
2021
    December 31,
2020
 
     (Unaudited)        

Assets

    

Current Assets:

    

Cash

   $ 449,773     $ 25,000  

Prepaid expenses

     383,813       —    
  

 

 

   

 

 

 

Total current assets

     833,586       25,000  
  

 

 

   

 

 

 

Deferred offering costs associated with proposed initial public offering

     —         131,695  

Other assets

     384,996       —    

Cash equivalents held in Trust Account

     250,008,083       —    
  

 

 

   

 

 

 

Total assets

   $ 251,226,665     $ 156,695  
  

 

 

   

 

 

 

Current Liabilities and Stockholders’ Equity

    

Current Liabilities:

    

Accrued expenses

   $ 46,630     $ 94,560  

Payables to related party

     424,773       37,640  

Sponsor loan—promissory notes

     1,040,144       —    

Franchise tax payable

     90,909       —    
  

 

 

   

 

 

 

Total Current Liabilities

     1,602,456       132,200  
  

 

 

   

 

 

 

Warrant liability

     9,386,666       —    

Forward purchase securities liability

     2,218,092       —    
  

 

 

   

 

 

 

Total liabilities

   $ 13,207,214     $ 132,200  
  

 

 

   

 

 

 

Commitments and Contingencies (Note 5)

    

Class A common stock subject to possible redemption, 23,301,945 shares at redemption value of $10.00 per share as of June 30, 2021

     233,019,450       —    

Stockholders’ equity

    

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of both June 30, 2021 and December 31, 2020

     —         —    

Common stock, Class A, $0.0001 par value; 240,000,000 shares authorized, 2,298,055 issued and outstanding (excluding 23,301,945 shares subject to possible redemption) as of June 30, 2021 and no shares issued and outstanding as of December 31, 2020

     230       —    

Common stock, Class B, $0.0001 par value; 30,000,000 shares authorized, 6,250,000 and 7,187,500 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

     625       719  

Additional paid-in-capital

     7,113,662       24,281  

Accumulated deficit

     (2,114,516     (505
  

 

 

   

 

 

 

Total stockholders’ equity

     5,000,001       24,495  
  

 

 

   

 

 

 

Total current liabilities and stockholders’ equity

   $ 251,226,665     $ 156,695  
  

 

 

   

 

 

 

 

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Income Statement

 

     For the Six
Months Ended
June 30, 2021
    For the Period from
January 23, 2020
(Inception) through
June 30, 2020
 
     (Unaudited)     (Unaudited)  

General and administrative costs

   $ 723,831     $ —    

Administrative expenses—related party

     49,643       —    

Franchise tax expense

     93,088       —    
  

 

 

   

 

 

 

Loss from operations

     (866,562     —    
  

 

 

   

 

 

 

Interest income on investments held in Trust Account

     8,083       —    

Change in fair value of warrant liability

     962,560    

Change in fair value of forward purchase securities liability

     (2,218,092  
  

 

 

   

 

 

 

Net loss

   $ (2,114,011   $ —    
  

 

 

   

 

 

 

Weighted average number of shares of common stock outstanding:

    

Class A—Public shares

     25,000,000       —    

Class A—Private placement

     600,000       —    

Class B—Common stock

     6,250,000       6,250,000  

Basic and diluted net income (loss) per share:

    

Class A—Public shares

   $
0.00
 
  $ —    

Class A—Private placement

   $ (0.31   $ —    

Class B—Common stock

   $
(0.31

  $ —    

 

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Statement of Cash Flows

 

     For the
Six Months
Ended

June 30, 2021
    For the Period from
January 23, 2020
(Inception) through
June 30, 2020
 
     (Unaudited)     (Unaudited)  

Cash flows from operating activities

    

Net Income

   $ (2,114,011   $ —    

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

    

General and administrative expenses paid by related party

     304,755       —    

Interest income on investments held in Trust Account

     (8,083     —    

Change in fair value of warrant liability

     (962,560     —    

Change in fair value of forward purchase securities liability

     2,218,092       —    

Change in operating assets and liabilities:

    

Accrued expenses

     (47,930     —    

Franchise tax payable

     90,909       —    

Deferred offering costs associated with proposed initial public offering

     131,695       —    

Payables to related party

     387,133       —    
  

 

 

   

 

 

 

Net cash used in operating activities

     —         —    

Cash flows from investing activities

    

Cash deposited in Trust Account

     (250,000,000     —    
  

 

 

   

 

 

 

Net cash used in investing activities

     (250,000,000     —    

Cash flows from financing activities

    

Proceeds from related party—Sponsor loan

     1,040,144       —    

Proceeds received from initial public offering

     250,000,000       —    

Proceeds received from private placement

     6,000,000       —    

Offering costs paid

     (5,393,362     —    

Payment of related party payable

     (1,222,009     —    
  

 

 

   

 

 

 

Net cash provided by financing activities

     250,424,773       —    

Net change in cash

     424,773       —    

Cash at beginning of period

     25,000       25,000  
  

 

 

   

 

 

 

Cash at end of period

   $ 449,773     $ 25,000  
  

 

 

   

 

 

 

 

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Introduction

The following selected unaudited pro forma condensed combined financial information is being provided to aid you in your analysis of the financial aspects of the Business Combination.

The selected unaudited pro forma condensed combined balance sheet as of June 30, 2021 gives pro forma effect to the Business Combination, as described and defined below, as if it had been consummated as of that date. The selected unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2021, and the year ended December 31, 2020 includes the historical operations of the Company for the six months ended June 30, 2021 and the year-ended December 31, 2020 and the historical operations of CF V for the six months ended June 30, 2021 and the period from January 23, 2020 (inception) to December 31, 2020, and gives pro forma effect to the Business Combination and Other Transaction Adjustments as if it had occurred as of January 1, 2020. This information should be read together with the consolidated financial statements of the Company and its related notes and CF V’s respective financial statements and related notes, “The Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “CF V’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included elsewhere in this proxy statement/prospectus.

The Other Transaction Adjustments are as follows:

 

   

On March 8, 2021, the Company entered into an exchange transaction with CRIL, a former shareholder of the Company and former holder of two Convertible Notes. Pursuant to the exchange transaction, the Company repurchased CRIL’s two Convertible Notes (one issued under the 2018 NPA and one issued under the 2019 NPA) having an aggregate principal amount, together with accumulated interest, of $8,813,161 as well as CRIL’s Company Series A Preference Shares. Company Series B Preference Shares and Company Series B-1 Preference Shares, in exchange for the Company Warrant to purchase an aggregate of 4,823,594 Company Series A Preference Shares, Company Series B Preference Shares, and Company Series B-1 Preference Shares (subject to adjustment as set forth therein) and the entering into the Columbia Loan providing for indebtedness in favor of CRIL having a principal amount of $40,089,033. For more information, see the section entitled “The Business Combination Proposal–Related Agreements—Debt and Share Exchange.”

 

   

As of on the date of this proxy statement (and subsequent to December 31, 2020), the Company raised $20,332,300 through the issuance of Company Series X Preference Shares. For more information, see “The Business Combination Proposal—Related Agreements—Series X Shareholder Agreement.”

The selected unaudited pro forma condensed combined balance sheet as of June 30, 2021 has been prepared using the following:

 

   

The Company’s historical unaudited consolidated statement of financial position as of June 30, 2021, as included elsewhere in this proxy statement/prospectus.

 

   

CF V’s historical unaudited consolidated balance sheet as of June 30, 2021, as included elsewhere in this proxy statement/prospectus.

The selected unaudited pro forma combined statement of operations for the six months ended

June 30, 2021 has been prepared using the following:

 

   

The Company’s historical unaudited consolidated statement of profit and loss for the six months ended June 30, 2021, as included elsewhere in this proxy statement/prospectus, and as adjusted to account for the Other Transaction Adjustments.

 

   

CF V’s historical unaudited consolidated statement of operations for the six months ended June 30, 2021, as included elsewhere in this proxy statement/prospectus.

 

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The selected unaudited pro forma combined statement of operations for the year ended December 31, 2020 has been prepared using the following:

 

   

The Company’s historical consolidated statement of profit and loss for the year ended December 31, 2020, as included elsewhere in this proxy statement/prospectus, and as adjusted to account for the Other Transaction Adjustments.

 

   

CF V’s historical condensed statement of operations for the period from January 23, 2020 (inception) to December 31, 2020, as included elsewhere in this proxy statement/prospectus.

The historical financial statements of the Company have been prepared in accordance with IFRS as issued by the IASB and in its presentation currency of United States dollars. The historical financial statements of CF V have been prepared in accordance with U.S. GAAP in its presentation currency of United States dollars. The historical financial information of CF V has been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the selected unaudited pro forma condensed combined financial information (see below).

 

($ amounts in USD)   Assuming No
Redemptions
    Assuming 50%
of Maximum
Redemptions
    Assuming
Maximum
Redemptions
 
    (unaudited)     (unaudited)     (unaudited)  

Selected Unaudited Pro Forma Condensed Combined Statement of Profit or Loss—Six Months Ended June 30, 2021

     

Revenue

  $ 1,706,275     $ 1,706,275     $ 1,706,275  

Total expenses

  $ (23,175,478   $ (23,175,478   $ (23,175,478

Operating loss

  $ (22,720,051   $ (22,720,051   $ (22,720,051

Net loss

  $ (20,858,035   $ (20,858,035   $ (20,858,035

Loss per share

  $ (0.18   $ (0.19   $ (0.21

Weighted average shares outstanding - basic and diluted

    113,395,775       107,145,775       100,895,775  

Selected Unaudited Pro Forma Condensed Combined Statement of Profit or Loss—Year Ended December 31, 2020

     

Revenue

  $ —       $ —       $ —    

Total expenses

  $ (123,049,479   $ (123,861,979   $ (124,674,479

Operating loss

  $ (123,027,085   $ (123,839,585   $ (124,652,085

Net loss

  $ (126,027,724   $ (126,840,224   $ (127,652,724

Loss per share

  $ (1.11   $ (1.18   $ (1.27

Weighted average shares outstanding - basic and diluted

    113,395,775       107,145,775       100,895,775  

Selected Unaudited Pro Forma Condensed Combined Statement of Financial Position—As of June 30, 2021

     

Total current assets

  $ 275,677,955     $ 213,177,955     $ 150,677,955  

Total assets

  $ 311,055,463     $ 248,555,463     $ 186,055,463  

Total current liabilities

  $ 8,875,026     $ 8,875,026     $ 8,875,026  

Total liabilities

  $ 14,467,994     $ 14,467,994     $ 14,467,994  

Total stockholders’ equity

  $ 296,587,469     $ 234,087,469     $ 171,587,469  

Total liabilities and shareholders’ equity

  $ 311,055,463     $ 248,555,463     $ 186,055,463  

 

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COMPARATIVE PER SHARE INFORMATION

The following table sets forth the historical comparative share information for the Company and CF V on a stand-alone basis and pro forma combined per share information after giving effect to the Business Combination assuming two scenarios: Scenario 1 includes (1) no CF V Stockholders exercise redemption rights with respect to their shares of CF V Class A Common Stock upon the consummation of the Business Combination; (2) that CF V Stockholders exercise their redemption rights with respect to 50% of the maximum of 12,500,000 shares, or 6,250,000 shares of CF V Class A Common Stock upon consummation of the Business Combination; (3) that CF V Stockholders exercise their redemption rights with respect to a maximum of 12,500,000 shares of CF V Class A Common Stock upon consummation of the Business Combination and (4) that no Company Shareholders exercise their appraisal rights with respect to Company Ordinary Shares; Scenario 2 includes the same conditions as described in Scenario 1, including the impact of the exercise of all outstanding PubCo Warrants.

The historical financial statements of the Company have been prepared in accordance with IFRS as issued by the IASB and in its presentation currency of U.S. Dollars. The historical financial statements of CF V have been prepared in accordance with U.S. GAAP in its presentation currency of U.S. Dollars. The historical financial information of CF V has been adjusted to give effect to the differences between U.S. GAAP and IFRS for the purposes of the pro forma combined financial information.

The historical information should be read in conjunction with the information in the sections entitled “Selected Historical Financial Information and Operating Data of the Company” and “Selected Historical Financial Information of CF V” and the historical financial statements of the Company and CF V included elsewhere in this proxy statement/prospectus. The pro forma combined per share information is derived from, and should be read in conjunction with, the information contained in the section of this proxy statement/prospectus entitled “Unaudited Pro Forma Condensed Combined Financial Information.”

The pro forma combined share information below does not purport to represent what the actual results of operations or the earnings per share would been had the companies been combined during the periods presented, nor to project PubCo’s results of operations or earnings per share for any future date or period. The pro forma combined shareholders’ equity per share information below does not purport to represent what the value of the Company and CF V would have been had the companies been combined during the periods presented.

 

(amounts in USD)   Nettar
Group Inc
6/30/2021
(Historical)
    Nettar
Group Inc
Adjusted
    CF
Acquisition
Corp V
6/30/2021
(Historical)
    Assuming
No
Redemptions
    Assuming
50% of
Maximum
Redemptions
    Assuming
Maximum
Redemptions
 

As of and for the six months ended June 30, 2021

           

June 30, 2021 book value per share (a)

  $ (34.37)     $ (34.37)     $ 0.16     $ 2.62     $ 2.18     $ 1.70  

June 30, 2021 book value per share including warrants (b)

  $ (34.37)     $ (34.37)     $ 0.16     $ 2.38     $ 1.98     $ 1.53  

Weighted average number of shares:

           

Class A Public shares

    —         —         25,000,000       —         —         —    

Class A Private placement

    —         —         600,000       —         —         —    

Class B Common stock

    —         —         6,250,000       —         —         —    

Ordinary shares

    4,985,434       4,985,434       —         —         —         —    

Class A ordinary shares

    —         —         —         113,395,775       107,145,775       100,895,775  

Class A ordinary shares assuming exercise of all warrants

    —         —         —         124,762,441       118,512,441       112,262,441  

Basic and Diluted Earnings (Loss) per share:

           

Class A Public shares

  $ —       $ —       $ —       $ —       $ —       $ —    

Class A Private placement

  $ —       $ —       $ (0.31   $ —       $ —       $ —    

Class B Common stock

  $ —       $ —       $ (0.31   $ —       $ —       $ —    

Ordinary shares

  $ (10.06   $ (8.20   $ —       $ —       $ —       $ —    

Class A ordinary shares

  $ —       $ —       $ —       $ (0.18   $ (0.19   $ (0.21

 

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(amounts in USD)   Nettar
Group Inc
12/31/2020
(Historical)
    Nettar
Group Inc
Adjusted
    CF
Acquisition
Corp V
12/31/2020
(Historical)
    Assuming
No
Redemptions
    Assuming
50% of
Maximum
Redemptions
    Assuming
Maximum
Redemptions
 

As of and for the year ended December 31, 2020

           

December 31, 2020 book value per share (a)

  $ (24.16)     $ (25.45)     $ 0.00     $ 2.76     $ 2.33     $ 1.86  

December 31, 2020 book value per share including warrants (b)

  $ (24.16)     $ (25.45)     $ 0.00     $ 2.51     $ 2.11     $ 1.67  

Weighted average number of shares:

           

Class A Public shares

    —         —         —         —         —         —    

Class A Private placement

    —         —         —         —         —         —    

Class B Common stock

    —         —         6,250,000       —         —         —    

Ordinary shares

    4,853,668       4,853,668       —         —         —         —    

Class A ordinary shares

    —         —         —         113,395,775       107,145,775       100,895,775  

Class A ordinary shares assuming exercise of all warrants

    —         —         —         124,762,441       118,512,441       112,262,441  

Basic and Diluted Earnings (Loss) per share:

           

Class A Public shares

  $ —       $ —       $ —       $ —       $ —       $ —    

Class A Private placement

  $ —       $ —       $ —       $ —       $ —       $ —    

Class B Common stock

  $ —       $ —       $ —       $ —       $ —       $ —    

Ordinary shares

  $ (23.47   $ (21.76   $ —       $ —       $ —       $ —    

Class A ordinary shares

  $ —       $ —       $ —       $ (1.11   $ (1.18   $ (1.27

 

(a)

Book value per share is calculated using the formula: Total stockholder’s equity divided by shares outstanding

(b)

Book value per share is calculated using the formula: Total stockholder’s equity divided by shares outstanding including exercise of all PubCo Warrants

 

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RISK FACTORS

CF V Stockholders should carefully consider the following risk factors, together with all of the other information included in this proxy statement/prospectus, before they decide whether to vote or instruct their vote to be cast to approve the proposals described in this proxy statement/prospectus.

Unless otherwise indicated or the context otherwise requires, references to PubCo refer to PubCo and its consolidated subsidiaries (including CF V and the Company) after giving effect to the Business Combination. References in this section to “CF V” refer to CF Acquisition Corp. V and references in this section to “the Company” refer to Nettar Group Inc. (d/b/a Satellogic) and its subsidiaries.

Risk Related to the Company’s Business and Industry

The Company is an early stage company that has not demonstrated a sustained ability to generate revenues. If it does not generate revenue as expected, its financial condition will be materially and adversely affected.

Since inception, the Company has devoted substantially all of its resources to designing, building and developing its satellites and satellite components and technology, enhancing its geospatial analytics capabilities and services, planning its business, raising capital and providing general and administrative support for these operations. As a relatively new business, the Company has not demonstrated a sustained ability to generate sufficient revenue from its geospatial intelligence, imagery and related data analytic products and services (“EO services”) or conduct sufficient sales and marketing activities necessary for successful commercialization of its platform. Consequently, any assessment you make about the Company’s current business or future success or viability may not be as accurate as it could be if the Company had a longer operating history. Further, the Company’s limited financial track record, without meaningful revenue from its expected future principal business, is of limited reference value for your assessment of the Company’s business and future prospects.

The Company incurred losses of approximately $113.9 million and $20.8 million for the years ended December 31, 2020 and 2019, respectively, and expects to begin to recognize revenues in 2021. The Company will continue to incur losses each quarter until it is able to onboard a sufficient number of customers and contracts, and launch and scale a sufficient number of its constellation of satellites, to become profitable. As the Company works to transition from initial start-up activities to commercial production and sales, it is difficult to forecast its future results. The Company has limited insight into trends that may emerge and affect its business, including its ability to attract and retain customers and the competition it will face. If the Company’s revenue grows slower than it anticipates or the Company otherwise falls materially short of its forecasts and expectations, it may not be able to achieve profitability and its financial condition will be materially and adversely affected which could cause PubCo’s stock price to decline and investors to lose confidence in PubCo.

The success of the Company’s business will be highly dependent on its ability to effectively market and sell its EO services and to convert contracted revenues and its pipeline of potential contracts into actual revenues, which can be a costly process.

To date, the Company has relied heavily on equity and debt financing to fund its business and operations, and is currently generating revenue from one large customer contract (Zhong Ke Guang Qi Space Information Technology Co., Ltd (“ABDAS”)) and a base of smaller customer contracts. Since launching 13 of its satellites in late 2020, the Company has significantly accelerated its sales and marketing efforts to government defense and intelligence agencies particularly in non-U.S. countries. The Company’s success will be highly dependent on its ability to convert its significant pipeline of potential contracts into recognized revenues. If the Company fails to sign contracts with at least some portion of the customers for large projects currently envisaged in its pipeline, particularly over the next couple of years when any large contract would significantly impact the Company’s revenues and financial results, and grow a sufficient number of contracts with such customers, its business, financial condition and results of operations will be materially and adversely affected.

 

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The Company’s ability to establish and expand its customer relationships and sell its EO services is subject to a number of factors, including its ability to overcome concerns by customers relating to the Company’s lack of experience or track record in providing EO services to customers in the same industry or at all, competition from larger, more experienced service providers, its customers’ satisfaction or dissatisfaction with its geospatial data and analytics platform and/or its geospatial intelligence, imagery and related data analytic products and services, the frequency and severity of errors or disruptions in its platform, reliability of its satellites and/or its platform, the effects of general economic conditions, competitive offerings or alternatives, reductions in the Company’s customers’ spending levels, and pricing.

In addition, continued concerns regarding prior ownership of a minority interest in the Company’s shares by a Chinese entity and its minor operations in China could impact the Company’s ability to win bids from, or enter into customer contracts with certain government agencies or commercial customers.

The Company’s sales growth is dependent upon its ability to implement sophisticated and potentially costly sales and marketing initiatives. These initiatives may not be effective in generating sales, and in such event results of operations will be harmed. In the near term, the Company intends to derive substantially all of its revenues from providing geospatial intelligence, imagery and related data analytic products and services to international government defense and intelligence agencies, and in the longer-term, intends to expand its operations to serve commercial customers in a variety of markets and industries. The Company cannot assure you that it will be able to secure future business or that the potential uses for its services in commercial applications will develop. It is difficult to predict the Company’s future revenues and appropriately budget for the Company’s expenses, and the Company has limited insight into trends that may emerge and affect its business. The projected financial information appearing elsewhere in this proxy statement/prospectus was prepared by Company management and reflects current estimates of future performance. In the event that actual results differ from the Company’s estimates or the Company adjusts its estimates in future periods, the Company’s operating results, prospects and financial position could be materially and adversely affected.

The Company’s sales efforts involve considerable time and expense and the Company’s sales cycle is often long and unpredictable.

The Company’s results of operations may fluctuate, in part, because of the intensive nature of its sales efforts and the length and unpredictability of its sales cycle. As part of its sales efforts, the Company invests considerable time and expense evaluating the specific needs and requirements of its potential customers which currently consist exclusively of government agencies and educating these potential customers about the technical capabilities and value of its satellites and its geospatial intelligence, imagery and related data analytic products and services as well as the better unit economics the Company can offer, which in the case of government agencies can be less important. In addition, the Company has a limited direct sales force, and its sales efforts have historically depended on the significant involvement of its senior management team. Given the nature of the potential customers, the length of the Company’s sales cycle tends to be long and also varies substantially from customer to customer. In addition, the timing and cycle of contract bidding processes particularly for government contracts can be very unpredictable and can change or lengthen on very little notice and for reasons outside of the Company’s control. Because decisions to purchase the Company’s EO services involves significant financial commitments, potential customers generally evaluate the Company’s products and technologies at multiple levels within their organization, each of which often have specific requirements, and typically involve senior officials and management, and multiple internal approvals. The Company could spend substantial time, effort, and money in its sales efforts without producing any sales. If the Company’s sales efforts to a potential customer do not result in sufficient revenue to justify its investments, its business, financial condition, and results of operations could be materially and adversely affected.

 

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The Company may face risks and uncertainties associated with defense-related contracts, which may have a material adverse effect on its business.

The Company is still largely an early stage company and expects to begin to recognize revenues in 2021. Acquiring defense-related governmental contracts is part of the Company’s growth strategy. To the extent the Company acquires defense-related customers, its geospatial intelligence, imagery and related data analytic products and services would be incorporated into different defense programs. Whether the Company’s contracts are directly with the U.S. government, a foreign government, or one of their respective agencies, or indirectly as a subcontractor or team member, its contracts and subcontracts would be subject to special risks. For example:

 

   

Changes in government administration and national and international priorities, including developments in the geo-political environment, could have a significant impact on national or international defense spending priorities and the efficient handling of routine contractual matters. These changes could have a negative impact on the Company’s business in the future.

 

   

The Company may compete directly with other suppliers or align with a prime or subcontractor competing for a contract. The Company may not be awarded the contract if the pricing or product offering is not competitive, either at the Company’s level or the prime or subcontractor level. In addition, in the event the Company is awarded a contract, it is subject to protests by losing bidders of contract awards that can result in the reopening of the bidding process and changes in governmental policies or regulations and other political factors. In addition, the Company may be subject to multiple rebid requirements over the life of a defense program in order to continue to participate in a program, which can result in the loss of the contract or significantly reduce the Company’s revenue or margin from the program. The government’s requirements for more frequent technology refreshes on defense programs may lead to increased costs and lower long term revenues.

 

   

Consolidation among defense industry contractors has resulted in a few large contractors with increased bargaining power relative to the Company. The increased bargaining power of these contractors may adversely affect the Company’s ability to compete for contracts and, as a result, may materially and adversely affect its business or results of operations in the future.

 

   

The Company’s usage policy currently restricts usage of its data and platforms for peaceful use only, and that may limit the Company’s ability to compete for and win certain defense related contracts.

The Company’s pricing structure may not be optimal and may require adjustments over time.

The pricing of the Company’s products and services will vary depending on the specific application and customer specifications. Given the complexity in determining pricing structures for its geospatial intelligence, imagery and related data analytic products and services, the Company may experience difficulty determining the appropriate price structure for its products and services. This may result in missed revenue opportunities and lower than expected margins if the Company prices its products and services too low, or in the Company losing bids if it prices its products and services too high. In addition, the Company expects that it may need to change its pricing model from time to time, including as a result of competition, global economic conditions, reductions in the Company’s customers’ spending levels generally, changes in product mix, pricing studies or changes in how information technology infrastructure is broadly consumed. Similarly, as the Company introduces new products and services, or as a result of the evolution of its existing products and services, it may have difficulty determining the appropriate price structure for its products and services. In addition, as new and existing competitors introduce new products or services that compete with the Company’s, or revise their pricing structures, the Company may be unable to attract new customers at the same price or based on the same pricing model as it will have used historically. Moreover, customers may demand price concessions. As a result, the Company may be required from time to time to revise its pricing structure or reduce its prices, which could materially and adversely affect its business, financial condition, and results of operations.

 

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The Company’s financial projections are subject to certain risks, assumptions, estimates and uncertainties particularly given its limited experience in forecasting revenue associated with new contracts. As a result, its projected revenues and profitability may differ materially from its expectations.

The Company operates in a rapidly changing and competitive industry and its projections will be subject to the risks and assumptions made by management with respect to its industry. Operating results are difficult to forecast because they generally depend on a number of factors, including the Company’s ability to attract and retain customers, the revenues generated by such customers under contracts it expects to sign, and the costs associated with the provision of services under such contracts. If the Company’s forecasting methods and assumptions are incorrect, the Company’s operating results in a given quarter may be higher or lower than expected. These factors make creating accurate forecasts and budgets challenging and, as a result, the Company may fall materially short of its forecasts and expectations, which could cause our stock price to decline and investors to lose confidence in us.

If the Company is unable to scale production of its satellites as planned, its business and results of operations could be materially and adversely affected.

The Company’s business plan and financial projections are based on the Company building out its constellation of satellites to 300 by 2025. The Company’s ability to achieve its production plans and deliver its products and services to its customers will depend upon many factors, including its ability to:

 

   

construct or acquire high throughput production factories to build a large number of satellites (at least 100 annually),

 

   

acquire sufficient quantities of third-party components and supplies;

 

   

recruit and train new staff while maintaining its desired quality levels,

 

   

implement an effective supplier strategy and supply chain management system; and

 

   

adopt manufacturing and quality control processes, which it must successfully introduce and scale for production at any new production facilities.

The Company may be unable to construct or acquire high throughput production factories within the planned timeframes, in a cost-effective manner or at all due to a variety of factors, including, but not limited to, a failure to acquire or lease a production facility, a stoppage of construction as a result of the COVID-19 pandemic, insufficiency of utility infrastructure, unexpected construction problems, permitting and other regulatory issues, severe weather, labor disputes, and issues with subcontractors or vendors. In addition, the cost to scale satellite production may be more than the Company is currently forecasting based on higher plant acquisition and build out costs, higher labor costs, increases in plant and equipment costs, increased transportation and supply chain costs and higher costs to manage and administer the plant and supply chain. The Company’s inability to build and launch satellites on the current projected timeline and at the expected cost could significantly delay or reduce expected revenue, profitability and cash flow over the next five years. No assurance can be given that construction will be completed on time or at all, or as to whether the Company will have sufficient funds available to complete construction if it experiences unexpected delays or costs.

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

The Company is dependent on third parties to transport its satellites and ground station equipment around the world and to launch and deliver its satellites into space. Currently there are only a few companies who offer launch services, including SpaceX, with whom the Company has entered into a multi-launch agreement. The Company requires timely and affordable access to launch services that meet its business and technical requirements to deploy for its satellite constellation. If the number of companies offering launch services or the number of launches does not grow in the future or there is a consolidation among companies who offer these

 

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services, this could result in a shortage of space on these launch vehicles, which may cause prices to increase, or result in the Company’s inability to secure space on a launch vehicle and, as a result, delays in its launch schedule. Additionally, adverse events with respect to the Company’s launch service providers, such as satellite launch failures or financial difficulties (which some of these providers have previously experienced), could result in increased costs or delays in the launch of the Company’s satellites. Moreover, a shortage of transportation providers for the Company’s satellites and ground station equipment may cause its costs to increase, delays in its ability to launch its satellites, gaps in its service coverage and adversely affect its ability to meet customer demand. Any of these situations could have a material adverse effect on the Company’s business, financial condition, and results of operations.

Further, in the event that a launch is delayed, the Company’s timing for recognition of revenue may be impacted depending on the length of the delay and the nature of its customer contracts. While such delays are common in the space industry, any delay in a launch could result in a delay in recognizing revenue which could materially and adversely impact the Company’s financial statements or result in negative impacts to its earnings during a specified time period, which could have a material adverse effect on its business, financial condition, and results of operations.

Although the Company designs many of its key satellite components, the Company relies on third party vendors and manufacturers to build and provide its satellite components, products or services and the inability of these vendors and manufacturers to meet the Company’s needs could have a material adverse effect on its business.

The Company designs the core components that go into developing and manufacturing its satellites to be mission specific, partners with third parties to manufacture those components for it and then assembles, integrates and tests the components and satellites in its own facilities. The Company also procures certain satellite components and technologies, from third parties, in some cases, on a single or sole-source basis. Though alternatives to supply and manufacture these components and products and technologies exist if a sole source supplier or manufacturer cannot meet the Company’s needs or is otherwise unavailable, the Company may be unable to find a suitable alternative without causing delays or increased costs. The Company’s ability to manage its production line and supply of raw materials and components to meet production goals may be constrained by its suppliers’ inability to scale production. An inability to grow the number of satellites the Company has in orbit could jeopardize its ability to fulfill obligations under customer contracts, which could, in turn, result in reduced sales, contract penalties or terminations, damage to customer relationships and the Company’s reputation and could have a material adverse effect on its business, financial condition, results of operations, or cash flows.

The Company is impacted by increases in the prices of raw materials used in the production of its satellites. The Company monitors sources of supply in an effort to attempt to assure that adequate raw materials and other components and supplies are available. Prolonged disruptions in the supply of any of its key raw materials or components, difficulty completing qualification of new sources of supply, implementing use of replacement materials, components or new sources of supply, or a continuing increase in the prices of raw materials, energy, or components could have a material adverse effect on the Company’s operating results, financial condition, or cash flows. Moreover, the imposition of tariffs or import/export restrictions on raw materials or supplied components could have a material adverse effect on the Company’s operations.

In addition, the Company cannot assure you that its suppliers have obtained and will be able to obtain or maintain all licenses, permits and approvals necessary for their operations or comply with all applicable laws and regulations, and failure to do so by them may lead to interruption in their business operations, which in turn may result in shortages of components supplied to the Company.

 

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The Company depends on ground station and cloud-based computing infrastructure operated by third parties for value added services, and any errors, disruption, performance problems or failure in their or its operational infrastructure could materially and adversely affect the Company’s business, financial condition and results of operations.

The Company relies on the technology, infrastructure, and software applications, including software-as-a-service offerings, of certain third parties, such as ground station infrastructure operated by two separate third party vendors, in order to launch and deliver its satellites into space and operate some or all of certain key features or functions of its business, including deployment of its cloud-based imagery services and other geospatial and data analytic services. The Company does not have control over the operations of the facilities of the third parties that it uses. If any of these third-party services experience errors, disruptions, security issues, or other performance deficiencies, if they are updated such that they become incompatible, if these services, software, or hardware fail or become unavailable due to extended outages, interruptions, defects, or otherwise, or if they are no longer available on commercially reasonable terms or prices (or at all), these issues could result in errors or defects in the delivery of the Company’s geospatial intelligence, imagery and related data analytic products and services, its ability to manage its operations could be interrupted, until equivalent services or technology, if available, are identified, procured, and implemented, all of which may take significant time and resources, increase the Company’s costs, and could materially and adversely affect its business financial condition and results of operations.

The Company’s customer contracts may require it to meet certain minimum service requirements which can vary significantly from customer to customer. Any failure to meet its service requirements may materially and adversely affect the Company’s business, results of operations and financial condition.

The Company’s agreements with customers may provide for minimum service level commitments, which contain specifications regarding the availability and performance of its products and services such as assured access and guaranteed capacity. Any failure of or disruption to the Company’s infrastructure could impact the performance of its satellites and the availability of its products and services to its customers. Although the Company’s customers will expect some level of potential disruption based on the product specifications and general operational conditions, if the Company is unable to meet any minimum service requirements or if it suffers extended periods of poor performance or unavailability of its products and services, it may lose customer contracts and suffer reputational harm which could materially and adversely affect the Company’s business, financial condition, and results of operations.

The market may not accept the Company’s geospatial intelligence, imagery and related data analytic products and services, and its business is dependent upon its ability to keep pace with the latest technological changes.

The market for the Company’s geospatial intelligence, imagery and related data analytic products and services is characterized by rapid technological change and evolving industry standards. Failure to respond in a timely and cost-effective way to these technological developments could have a material adverse effect on the Company’s business and operating results. As a result, the Company’s success will depend, in part, on its ability to develop and market service offerings that respond in a timely manner to the technological advances and needs of its customers, and evolving industry standards. In addition, although in the near term, the Company intends to derive substantially all its revenues from providing geospatial intelligence, imagery and related data analytic products and services to international government defense and intelligence agencies, in the longer-term, it intends to expand its operations to serve commercial customers in a variety of markets and industries and through a wide range of applications.

The Company believes that, in order to remain competitive in the future, it will need to continue to invest significant financial resources to improve the technology its existing products and services and develop new products and services both for existing applications and new commercial applications, including through internal research and development, acquisitions and joint ventures or other collaboration arrangements. These

 

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expenditures could divert the Company’s attention and resources from other projects, and it cannot be sure that these expenditures will ultimately lead to the timely development of new product or service offerings and technologies or identification of and expansion into new markets and applications.

Due to the design complexity of the Company’s products and services, it may, in the future, experience delays in completing the development and introduction of new or enhanced products or product applications. Any delays could result in increased costs of development or deflect resources from other projects. In addition, there can be no assurance that the market for the Company’s geospatial intelligence, imagery and related data analytic products and services will develop or continue to expand or that the Company will be successful in identifying new markets or applications as it currently anticipates. The failure of the Company’s technology to gain market acceptance could significantly reduce its planned revenues and harm its business. Market acceptance of the Company’s products and services depends on a number of factors, including the quality, scope, timeliness, sophistication, and price of substitute products and services. The Company cannot be sure that its competitors will not develop competing technologies that gain market acceptance in advance of the Company’s technologies or develop technologies that better meet the needs of the Company’s customers. The possibility exists that the Company’s competitors might develop new technology or offerings that might cause the Company’s existing technology and offerings to become obsolete. If the Company fails to develop, manufacture, and market innovative technologies that enable the Company’s products and services to meet customers’ requirements or its technologies fail to achieve market acceptance more rapidly as compared to its competitors, its ability to procure new contracts could be negatively impacted and its business may not continue to grow in line with expectations or at all. If the Company is unable to achieve sustained growth, it may be unable to execute its business strategy, expand its business or fund other liquidity needs and its business, financial condition, and results of operations could be materially and adversely affected.

The Company may not be able to identify suitable acquisition candidates or consummate acquisitions on acceptable terms, or the Company may be unable to successfully integrate acquisitions, which could disrupt its operations and materially and adversely impact its business and operating results.

The Company intends to continue to pursue acquisitions of complementary technologies, products and businesses as a component of its growth strategy. Acquisitions involve certain known and unknown risks that could cause the Company’s sales growth or operating results to differ from its expectations. For example:

 

   

the Company may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms;

 

   

the Company may not be able to obtain the necessary financing, on favorable terms or at all, to finance any or all of its potential acquisitions; and

 

   

acquired technologies, products or businesses may not perform as the Company expects and the Company may fail to realize the anticipated benefits from the acquisition.

In addition, the Company’s acquisition strategy may divert management’s attention away from its existing business, resulting in the loss of key customers or employees, and expose the Company to unanticipated problems or legal liabilities, including responsibility as a successor for undisclosed or contingent liabilities of acquired businesses or assets.

If the Company fails to conduct due diligence on its potential targets effectively, for example, the Company may not identify problems at target companies or fail to recognize incompatibilities or other obstacles to successful integration. The Company’s inability to successfully integrate future acquisitions could impede it from realizing all of the benefits of those acquisitions and could materially weaken its business operations. The integration process may disrupt the Company’s business and, if new technologies, products or businesses are not implemented effectively, may preclude the realization of the full benefits expected by the Company and could harm its results of operations. In addition, the overall integration of new technologies, products or businesses may result in unanticipated problems, expenses, liabilities and competitive responses.

 

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Further, even if the operations of an acquisition are integrated successfully, the Company may not realize the full benefits of the acquisition, including the synergies, cost savings or growth opportunities that it expects. These benefits may not be achieved within the anticipated time frame, or at all. Further, acquisitions may cause the Company to issue securities that would dilute its current stockholders’ ownership percentage, use a substantial portion of its cash resources, experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liability estimates or become subject to litigation.

The Company faces competition for geospatial intelligence, imagery and related data analytic products and services which may limit its ability to gain market share.

The Company operates in the NewSpace sector, which refers to the increased commercialization and privatization of the space sector. Competition in the Company’s imagery services business is highly diverse, and while its competitors offer different products, there is often competition for contracts that are part of governmental budgets. The Company’s major existing and potential competitors for its geospatial intelligence, imagery and related data analytic products and services include commercial satellite imagery companies, state-owned imagery providers, aerial imagery companies, free sources of imagery and unmanned aerial vehicles. The Company also faces competition from companies that provide geospatial data analytic information and services to the U.S. government, including defense prime contractors.

The Company plans to leverage its superior unit economics and put enough satellites in orbit to remap the entire surface of the earth in high-resolution on a daily basis and, in doing so expects to deliver its data to customers at near zero marginal cost which the Company believes will provide it with a competitive advantage. However, the Company’s competitors or potential competitors could, in the future, offer satellite-based imagery or other products and services with more attractive features than the Company’s products and services that could outweigh the lower cost of the Company’s products and services. The emergence of new remote imaging technologies or the continued growth of low-cost imaging satellites, could negatively affect the Company’s sales efforts. More importantly, if competitors develop and launch satellites or other imagery-content sources with more advanced capabilities and technologies than the Company’s, or offer products and services at lower prices than the Company’s, the Company’s business and results of operations could be harmed.

The U.S. government and foreign governments may develop, construct, launch and operate their own imagery satellites, which could reduce their need to rely on the Company and other commercial suppliers. In addition, such governments could sell or provide free of charge imagery from their satellites and thereby compete with the Company’s geospatial intelligence, imagery and related data analytic products and services. Also, governments may at times make the Company’s imagery freely available for humanitarian purposes, which could impair the Company’s revenue growth with non-governmental organizations.

In addition, some of the Company’s international competitors currently benefit from, and others may benefit in the future from, subsidies and other protective measures by their home countries where governments are providing financial support, including significant investments in the development of new technologies. Government support of this nature greatly reduces the commercial risks associated with satellite development activities for these competitors. This market environment may result in increased pressures on the Company’s pricing and other competitive factors.

Some of the Company’s competitors have made or could make acquisitions of businesses that allow them to offer more competitive and comprehensive solutions. As a result of such acquisitions, the Company’s current or potential competitors may be able to accelerate the adoption of new technologies that better address customer needs, devote greater resources to bring these products and services to market, initiate or withstand substantial price competition, or develop and expand their product and service offerings more quickly than the Company. These competitive pressures in the Company’s market or its failure to compete effectively may result in fewer orders, reduced revenue and margins, and ability to acquire market share. In addition, it is possible that industry consolidation may impact customers’ perceptions of the viability of smaller or even mid-size companies and consequently customers’ willingness to purchase from such firms.

 

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The Company may not compete successfully against its current or potential competitors. If the Company is unable to compete successfully, or if competing successfully requires the Company to take costly actions in response to the actions of its competitors, its business, financial condition, and results of operations could be materially and adversely affected. In addition, companies competing with the Company may have an entirely different pricing or distribution model. Increased competition could result in fewer customer contracts, price reductions, reduced margins, and inability to gain market share, any of which could harm the Company’s business and results of operations.

The Company may fail to foresee challenges with international operations.

The Company’s future success will depend heavily upon on its ability to oversee production operations at facilities and locations outside of the United States and management’s day-to-day oversight. Its international operations expose it to numerous challenges and risks, including, but not limited to, adverse political, regulatory, legislative and economic conditions in various jurisdictions; costs of complying with varying governmental regulations; fluctuations in currency exchange rates; and difficulties in protecting intellectual property rights in foreign countries. Unforeseen challenges in sustaining efficient operations, decreases in product quality, language and cultural difference, political and economic unrest, or theft of intellectual property from these satellite production facilities, or other yet undiscovered challenges could materially and adversely affect the Company, its financial position, results of operations and cash flows.

The Company’s products and services are complex and could have unknown defects or errors, which may increase its costs, harm its reputation with customers, give rise to costly litigation, or divert its or its customers’ resources from other purposes.

The Company employs sophisticated design and testing processes and practices. Nevertheless, the Company’s products and services may contain defects or errors, or experience performance problems when first introduced, when new versions or enhancements are released, or even after these products have been in use for a period of time. The Company’s systems may not be successfully implemented, pass required acceptance criteria, or operate or give the desired output, or it may not be able to detect and fix all defects in the satellites and its geospatial intelligence, imagery and related data analytic products and services, or resolve any delays or availability issues in the launch services it procures. These problems could result in expensive and time-consuming design modifications, delays in the introduction of new products or enhancements, significant increases in the Company’s service and maintenance costs, termination of contracts for convenience, diversion of its personnel’s attention from its product development efforts, exposure to liability for damages, damaged customer relationships, and harm to its reputation, any of which could materially and adversely harm its results of operations. In addition, increased development costs could be substantial and could reduce the Company’s operating margins.

The Company’s employees or others acting on its behalf may engage in misconduct or other improper activities, which could cause it to lose contracts or cause it to incur costs.

The Company is exposed to the risk that employee fraud or other misconduct from its employees or others acting on its behalf could occur. Misconduct by employees or others could include intentional failures to comply with the various regulatory regimes to which the Company is subject, engaging in unauthorized activities, insider threats to its cybersecurity, or falsifying records relating to the success or failure of its launches, satellites or products and services generally. Misconduct by the Company’s employees or others acting on its behalf could also involve the improper use of its customers’ sensitive or classified information, which could result in regulatory sanctions against it, serious harm to its reputation, a loss of contracts and a reduction in revenues, or cause it to incur costs to respond to any related governmental inquiries. The Company has adopted policies and procedures designed to prevent misconduct. However, it is not always possible to deter misconduct, and the precautions the Company takes to prevent and detect this activity may not be effective in controlling unknown or unmanaged risks or losses, which could cause it to lose contracts or cause a reduction in revenues. In addition, alleged or actual misconduct by employees or others acting on the Company’s behalf could result in

 

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investigations or prosecutions of persons engaged in the subject activities, which could result in unanticipated consequences or expenses and management distraction for the Company regardless of whether it is alleged to have any responsibility.

The Company may in the future experience such misconduct, despite its various compliance programs. Actual or alleged misconduct or improper actions by the Company’s employees, agents, subcontractors, suppliers, business partners and/or joint ventures could subject it to administrative, civil or criminal investigations and enforcement actions; monetary and non-monetary penalties; liabilities; and the loss of privileges and other sanctions, including suspension and debarment, which could negatively impact its reputation and ability to conduct or attract new business and could materially and adversely affect the Company, its financial position, results of operations and cash flows.

The Company’s business is capital intensive, and it may not be able to raise adequate capital to finance its business strategies, including funding future satellites, or it may be able to do so only on terms that significantly restrict its ability to operate its business.

Implementation of the Company’s business strategy, such as expanding its satellite constellation and its products and services offerings, requires a substantial outlay of capital. As the Company pursues its business strategies and seeks to respond to opportunities and trends in its industry, its actual capital expenditures may differ from its expected capital expenditures. The nature of the Company’s business also requires it to make capital expenditure decisions in anticipation of customer demand, and it may not be able to correctly predict customer demand. If the Company’s customer demand exceeds its ability to respond to that demand, it may not be able to fully capture the growth in demand.

The Company currently expects that its ongoing liquidity requirements for sustaining its operations will be satisfied by cash on hand, cash from the Business Combination with CF V, and cash generated from its existing and future operations supplemented, where necessary or advantageous, by available credit. However, the Company cannot provide assurances that its businesses will generate sufficient cash flow from operations in the future or that additional capital will be available in amounts sufficient to enable it to execute its business strategies. The availability and cost to the Company of external financing depend on a number of factors, including general market conditions, its financial performance and its credit rating. Both the Company’s credit rating and its ability to obtain financing generally may be influenced by the supply and demand characteristics of its industry generally. Declines in the Company’s expected future revenue under contracts with customers and challenging business conditions faced by its customers are among factors that may adversely affect its credit. Other factors that could impact the Company’s credit include the amount of debt in its capital structure, activities associated with its strategic initiatives, its expected future cash flows, and the capital expenditures required to execute its business strategy. The overall impact on the Company’s financial condition of any transaction that it pursues may be negative or may be negatively perceived by the financial markets and ratings agencies and may result in adverse rating agency actions with respect to any credit rating it may have from time to time. A disruption in the capital markets, due to COVID-19 or otherwise, a deterioration in the Company’s financial performance or a credit rating downgrade could limit its ability to obtain financing or could result in any such financing being available only at greater cost or on more restrictive terms than might otherwise be available. The Company’s debt agreements also may impose restrictions on operation of its business and could make it more difficult for it to obtain additional external financing if required.

Long-term disruptions in the capital and credit markets as a result of uncertainty due to recessions, changing or increased regulation or failures of significant financial institutions could adversely affect the Company’s access to capital. If financial market disruptions occur, it may become difficult for the Company to raise additional capital or refinance debt when needed, on acceptable terms or at all. Any disruption could require us to take measures to conserve cash until the markets stabilize or until alternative credit arrangements or other funding for its business needs can be arranged. Such measures could include deferring capital expenditures and reducing or eliminating other discretionary uses of cash, which could materially and adversely impact the Company’s business and its ability to execute its business strategies.

 

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Risks Relating to the Company’s Satellites and Industry

The Company’s ability to grow its business depends on the successful production, launch, commissioning and/or operation of its satellites and related ground systems, software and analytic technologies, which is subject to many uncertainties, some of which are beyond its control.

The Company’s current primary research and development objectives focus on the development of satellites and related components that can remap the entire surface of the Earth in high resolution as well as the Company’s geospatial intelligence, imagery and related data analytic products and services, including creating a catalog of archived data. The Company has limited operational experience with its satellites with only 17 commercial satellites in orbit, all of which are presently delivering high-resolution data to its customers. While the Company estimates the gross costs associated with designing, building and launching its satellites to build out its constellation will be significant, there can be no assurance that it will complete these deployments on a timely basis, on budget or at all. Design, manufacture and launch of satellite systems are highly complex and historically have been subject to delays and cost over-runs. If the Company does not complete development and manufacturing of additional satellites in its anticipated timeframes or at all, its ability to grow its business will be adversely affected. The successful development, integration, and operations of the Company’s satellites and its geospatial intelligence, imagery and related data analytic products and services involves many uncertainties, some of which are beyond its control, including, but not limited to:

 

   

timing in finalizing satellite design and specifications;

 

   

performance of satellites meeting design specifications;

 

   

failure of satellites as a result of technological or manufacturing difficulties, design issues or other unforeseen matters;

 

   

engineering and/or manufacturing performance failing or falling below expected levels of output or efficiency;

 

   

increases in costs of materials and supplied components;

 

   

changes in project scope;

 

   

its ability to obtain additional applicable approvals, licenses or certifications from regulatory agencies, if required, and maintaining current approvals, licenses or certifications;

 

   

performance of its manufacturing facilities despite risks that disrupt productions, such as natural disasters, catastrophic events or labor disputes;

 

   

performance of a limited number of suppliers for certain raw materials and supplied components, the accuracy of supplier representations as to the suitability of such raw materials and supplied components for its products, and their willingness to do business with it;

 

   

performance of its internal and third-party resources that support its research and development activities;

 

   

its ability to protect its intellectual property critical to the design and function of its satellites and its geospatial intelligence, imagery and related data analytic products and services;

 

   

its ability to continue funding and maintaining its research and development activities;

 

   

successful completion of demonstration missions; and

 

   

the impact of the COVID-19 pandemic on it, its customers and suppliers, and the global economy.

If any of the above events occur, they could have a material adverse effect on the Company’s ability to continue to develop, integrate and operate its satellites and related infrastructure, products and services, which could materially adversely affect its business, financial condition and results of operations.

 

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The market for geospatial intelligence, imagery and related data analytics has not been established with precision, is still emerging and may not achieve the growth potential the Company expects or may grow more slowly than expected.

The market for geospatial intelligence, imagery and related data analytics has not been established with precision as the commercialization of space is a relatively new development and is rapidly evolving. The Company’s views of the total addressable market are based on a number of third-party reports which may or may not accurately reflect future market size and growth. As a result, the Company’s views of the total addressable market for its products and services may prove to be incorrect. In addition, if interest in the Company’s EO data and analytic products and services by commercial customers, or the expected growth in commercial applications for EO data and analytics, is less than expected, or the Company’s satellite and related technologies are unable to meet expected customer expectations and demand, the Company’s business and financial results will be materially and adversely affected.

The Company’s industry is characterized by changing technology and evolving standards, and it may not be successful in identifying, developing and marketing products and services that respond to rapid technological change, evolving technical standards and systems developed by others. The Company’s competitors may develop technology that better meets the needs of its customers. If the Company does not continue to develop, manufacture, and market innovative technologies or applications that meet customers’ requirements, sales may suffer, and the Company may not be able to grow its business. If the Company is unable to achieve sustained growth, it may be unable to execute its business strategy, expand its business or fund other liquidity needs, and its business prospects, financial condition and results of operations could be materially and adversely affected.

If the Company’s satellites and related equipment have shorter useful lives than it anticipates, it may be required to recognize impairment charges.

The Company evaluates its satellites for impairment and test for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Certain of the anomalies disclosed below may be considered to represent a significant adverse change in the physical condition of a particular satellite. There can be no assurance as to the actual operational life of a satellite or that the operational life of individual components will be consistent with their design life. A number of factors will impact the useful lives of the Company’s satellites, including, among other things, the quality of their design and construction, the durability of their component parts, and the occurrence of any anomaly or series of anomalies or other risks affecting the satellites during launch and in orbit. The Company currently anticipates the useful life of one of its operational satellites is approximately three years. If the Company’s satellites and related equipment have shorter useful lives than it currently anticipates, this may lead to delays in increasing the rate of its commercial payloads and declines in actual or planned revenues, which would have a material adverse effect on its business, financial condition, and results of operations.

Long-lived assets are tested periodically for impairment or whenever there is an indication that an asset may be impaired. Disruptions to the Company’s business, unexpected significant declines in its operating results, adverse technological events or changes in the regulatory markets in which it operates may result in impairment charges to its tangible and intangible assets. Any future impairment charges could substantially affect the Company’s reported results.

If the Company’s satellites fail to operate as intended, it could have a material adverse effect on its business, financial condition and results of operations.

The Company relies on data obtained from its satellites in order to provide services to its customers. The Company may become unable or limited in its ability to collect such data. For example, satellites can temporarily go out of service and be recovered, or cease to function for reasons beyond the Company’s control, including the quality of design and construction, the rate of consumption of the propellant supply, the expected gradual environmental degradation of solar panels, the durability of various satellite components and the orbits and space

 

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environments in which the satellites are placed and operated. The accumulated effects of solar radiation and single event upsets or electronic/catch-up events from the collision of charged particles, collisions with other objects (including, but not limited to, space debris and other spacecraft) or actions by malicious actors, including cyber related, could also damage the satellites and subject the Company to liabilities for any damages caused to other spacecraft.

The manufacturing, testing, launching and operation of satellites involves complex processes and technology. The Company’s satellites employ advanced technologies and sensors that are exposed to severe environmental stresses that have and could affect the performance of its satellites. Hardware component problems could lead to deterioration in performance or loss of functionality of a satellite. In addition, human operators may execute improper implementation commands that may negatively impact a satellite’s performance. Exposure of the Company’s satellites to an unanticipated catastrophic event, such as a meteor shower or a collision with space debris, could reduce the performance of, or completely destroy, the affected satellite. Even if a satellite is operated properly, minor technical flaws in the satellite’s sensors could significantly degrade their performance, which could materially affect the Company’s ability to collect imagery and market the Company’s products and services successfully.

Satellites can experience malfunctions, commonly referred to as anomalies, which have occurred and may occur in the future in the Company’s satellites. The satellites the Company employs have experienced various anomalies in the past and will likely experience anomalies in the future. Anomalies can occur as a result of various factors, such as satellite manufacturer error, whether due to the use of new or largely unproven technology or due to a design, manufacturing or assembly defect that was not discovered before launch and general failures resulting from operating satellites in the space environment. Any single anomaly could materially and adversely affect the Company’s ability to utilize the satellite. Anomalies may also reduce the expected capacity, commercial operation and/or useful life of a satellite, thereby reducing the revenue that could be generated by that satellite or create additional expenses due to the need to provide replacement or back-up satellites or satellite capacity earlier than planned and could have a material adverse effect on the Company’s business. In addition, if a satellite or satellites experience a malfunction, the satellite capacity of the Company’s unimpacted network may be insufficient to meet all of its customers’ needs or cause service interruptions, and it may need to potentially blackout or reduce service to certain customers, which would adversely affect its relationships with its customers and result in loss of revenues. Although the Company works diligently both internally and with its suppliers to determine and eliminate the cause of anomalies in new satellites and provide for redundancies of many critical components in the satellites, it may not be able to prevent the impact of anomalies in the future.

The Company cannot provide assurances that its satellites will continue to operate successfully in space throughout their expected operational lives. Even if a satellite is operated properly, technical flaws in that satellite’s sensors or other technical deficiencies or anomalies could significantly hinder its performance, which could materially affect the Company’s ability to collect imagery and market its products and services successfully. While certain software deficiencies may be corrected remotely, most, if not all, of anomalies or debris collision damage cannot be corrected once the satellites are placed in orbit. Further, although the Company has some ability to actively maneuver its satellites to avoid potential collisions with space debris or other spacecraft, this ability is limited by, among other factors, uncertainties and inaccuracies in the projected orbit location of and predicted conjunctions with debris objects tracked and cataloged by the U.S. government. Additionally, some space debris is too small to be tracked and therefore its orbital location is completely unknown; nevertheless, this debris is still large enough to potentially cause severe damage or a failure of the Company’s satellites should a collision occur. Recent years have seen increases in the number of satellites deployed to low earth orbits, and publicly announced plans call for many thousands of additional satellite deployments over the next decade. The proliferation of these low Earth orbit constellations could materially increase the risks of potential collision with space debris or another spacecraft and affect the Company’s ability to effectively access sufficient orbital slots to support the expected growth across its business.

 

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If the Company suffers a partial or total loss of a deployed satellite, it could need a significant amount of time and could incur substantial expense to replace that satellite. The Company may experience other problems with its satellites that may reduce their performance. If a satellite is not fully operational, the Company may lose most or all of the revenue that otherwise would have been derived from that satellite and may not be able to provide adequate services to its customers which may cause it to incur penalties under its contracts or may allow its customers not to pay it for the time that service was impacted. The Company’s inability to repair or replace a defective satellite or correct any other technical problem in a timely manner could result in a significant loss of revenue. If a satellite experiences a significant anomaly such that it becomes impaired or is no longer functional, it could significantly impact the Company’s business, prospects and profitability.

Many satellites have redundant or backup systems and components that operate in the event of an anomaly, operational failure or degradation of primary critical components, but these redundant or backup systems and components are subject to risk of failure similar to those experienced by the primary systems and components. The occurrence of a failure of any of these redundant or backup systems and components could materially impair the useful life, capacity or operational capabilities of the satellite.

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

Delays in the production of future satellites and the manufacture or procurement of requisite components and launch vehicles, limited availability of appropriate launch windows, possible delays in obtaining regulatory approvals, satellite damage or destruction during launch, launch failures, or incorrect orbital placement could have a material adverse effect on the Company’s business, financial condition, and results of operations. The loss of, or damage to, a satellite due to a launch failure could result in significant delays in anticipated revenue to be generated by that satellite. Any significant delay in the commencement of service of a satellite could delay or potentially permanently reduce the revenue anticipated to be generated by that satellite. In addition, if the loss of a satellite were to occur, the Company may not be able to accommodate affected customers with its other satellites or data from another source until a replacement satellite is available, and it may not have on hand, or be able to obtain in a timely manner, the necessary funds to cover the cost of any necessary satellite replacement. An extended launch delay beyond planned contingency, launch failure, underperformance, delay or perceived delay could have a material adverse effect on the Company’s business prospects, financial condition, and results of operations. If delays were to occur and the Company’s remediation measures and process changes were not successful or if it experiences issues with planned manufacturing improvements or design and safety, it could experience issues in scaling up further satellite production. Such delays could cause the Company to fail to reach its goal of expanding and scaling its constellation of satellites. A failure to reach a sufficient number of satellites in the Company’s constellation may impact the revisit rates it is able to offer its customers and limit its product offerings, thereby making it less attractive to existing and potential customers.

Launch vehicles may also under-perform, in which case the satellite may still be placed into service by using its onboard propulsion systems to reach the desired orbital location, resulting in a reduction in its service life. In addition, although the Company intends to purchase launch insurance on all of its launches, if it were not able to obtain launch insurance on commercially reasonable terms and a launch failure were to occur, it would directly suffer the loss of the cost of the satellite and related costs.

The Company’s business involves significant risks and uncertainties that may not be covered by insurance.

The Company endeavors to obtain insurance coverage from established insurance carriers to cover certain risks and liabilities related to its business. However, the amount of insurance coverage that the Company maintains may not be adequate to cover all claims or liabilities. Existing coverage may be canceled while the Company remains exposed to the risk and it is not possible to obtain insurance to protect against all operational risks, natural hazards and liabilities.

 

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Although the Company maintains insurance policies that it believes to be adequate, it cannot provide assurance that this insurance will be adequate to protect it from all material judgments and expenses related to potential future claims or that these levels of insurance will be available in the future at economical prices or at all. A successful liability claim could result in substantial cost to the Company. Even if the Company is fully insured as it relates to a claim, the claim could nevertheless diminish the Company’s brand and divert management’s attention and resources, which could have a negative impact on the Company’s business, financial condition, and results of operations.

Although the Company maintains pre-launch and launch insurance coverage for its satellites, it does not maintain in-orbit lifecycle insurance coverage. Any damage or destruction to the Company’s satellites while in orbit as a result of anomalies, failures, collisions with its satellites or other satellites or debris, radiation damage or other catastrophic event will not be covered by insurance. The Company will be required to pay for the repair or replacement of such satellite which may have a material adverse effect on its financial condition and results of operation.

The Company does not maintain third-party liability insurance with respect to its satellites. Accordingly, the Company currently has no insurance to cover any third-party damages that may be caused by any of its satellites, including personal and property insurance. If the Company experiences significant uninsured losses, such events could have a material adverse impact on its business, financial condition and results of operations.

The Company typically purchases pre-launch and launch insurance coverage for its satellites to address the risk of potential systemic anomalies, failures, collisions with its satellites or other satellites or debris, or catastrophic events that occur prior to or during launch. However, such insurance may be insufficient or unavailable on acceptable cost and terms, if at all.

The Company has historically purchased pre-launch and launch insurance to address the risk of potential systemic anomalies, failures, collisions with its satellites or other satellites or debris, or catastrophic events during launch, to the extent that insurance was available on acceptable premiums and other terms. The insurance proceeds received in connection with a partial or total loss of the functional capacity of any of the Company’s satellites would not be sufficient to cover the replacement cost, if the Company chooses to do so, of an equivalent satellite. In addition, this insurance will not protect the Company against all losses to its satellites due to specified exclusions, deductibles and material change limitations and it may be difficult to insure against certain risks, including a partial deterioration in satellite performance and satellite re-entry.

The price and availability of insurance fluctuate significantly. Insurance market conditions or factors outside the Company’s control at the time it is in the market for the required insurance, such as failure of a satellite using similar components, could cause premiums to be significantly higher than current estimates and could reduce amounts of available coverage. The cost of the Company’s insurance has been increasing and may continue to increase. Higher premiums on insurance policies will reduce the Company’s operating income by the amount of such increased premiums. If the terms of insurance policies become less favorable than those currently available, there may be limits on the amount of coverage that the Company can obtain, or the Company may not be able to obtain insurance at all.

Coordination results may adversely affect the Company’s ability to use its satellites in certain orbital locations for its proposed service or coverage area or may delay its ability to launch satellites and thereby operate its proposed services.

The Company will be required to record orbital locations and operational parameters of its satellites with the International Telecommunication Union and to coordinate with other satellite operators and national administrations the use of these orbital locations and operational parameters in order to avoid interference to or from other satellites. The results of coordination may adversely affect the Company’s use of its satellites using certain orbital locations as well as the type of applications or services that the Company can accommodate. If the

 

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Company is unable to coordinate its satellites by specified deadlines, the Company may not be able to use its satellites or certain orbital locations for its proposed service or coverage area or it may lose interference protection for its satellites. The use of the Company’s satellites may also be temporarily or permanently adversely affected if the operation of other satellite networks do not conform to coordination agreements resulting in the acceptable interference levels being exceeded (such as due to operational errors associated with the transmissions to other satellite networks).

Natural disasters, unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt the Company’s business or satellite launch schedules. Interruption or failure of the Company’s infrastructure could hurt its ability to effectively perform its daily operations and provide and produce its products and services, which could damage its reputation and materially and adversely affect its operating results.

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

The availability of many of the Company’s geospatial intelligence, imagery and related data analytic products and services depends on the continuing operation of its satellite operations infrastructure, satellite manufacturing operations, information technology and communications systems. Any downtime, damage to or failure of the Company’s systems could result in interruptions in its service, which could reduce its revenues. The Company’s systems are vulnerable to damage or interruption from floods, fires, power loss, aging infrastructure, telecommunications failures, computer viruses, computer denial of service attacks or other attempts to harm the Company’s systems. In the event the Company is unable to collect, process and deliver imagery from its facility, its daily operations and operating results would be materially and adversely affected. In addition, the Company’s ground terminal centers are vulnerable to damage or interruption from human error, intentional bad acts, earthquakes, hurricanes, floods, fires, war, terrorist attacks, power losses, hardware failures, systems failures, aging infrastructure, telecommunications failures and similar events. The occurrence of any of the foregoing could result in lengthy interruptions in the Company’s services and/or damage its reputation, which could have a material adverse effect on its business, financial condition, and results of operations.

The occurrence and impact of these factors is difficult to predict, but one or more of them could have a material adverse effect on the Company’s financial position, results of operations and/or cash flows.

Prolonged unfavorable weather conditions could negatively impact the Company’s operations.

In order for satellites to collect and deliver imagery effectively, the satellite must be able to view the desired area on a certain day at a certain time as it passes overhead. Adverse weather conditions, such as clouds or haze, may prevent satellites from collecting data and imagery or could cause the satellite to experience technical difficulties communicating with the ground terminals or collecting imagery in the same quality or volume that was intended. In addition, space weather, such as solar flares, could take the Company’s satellites out of orbit, disrupt the Company’s ground communication networks and affect the decay rate of its satellites. The occurrence of any of the foregoing could result in interruptions, which could be lengthy, in the Company’s services and/or damage its reputation, which could have a material adverse effect on its business, financial condition, and results of operations.

 

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Risks Relating to Legal and Regulatory Matters

The Company is subject to stringent U.S. export and import control laws and regulations. Unfavorable changes in these laws and regulations or U.S. government licensing policies, the Company’s failure to secure timely U.S. government authorizations under these laws and regulations, or the Company’s failure to comply with these laws and regulations could have a material adverse effect on its business, financial condition and results of operations.

The Company has a global supply chain of upstream and downstream partners including manufacturers, suppliers and launch providers from a number of countries including the U.S. Based on these activities, the Company may be required to comply with U.S. export control laws and regulations, including the International Traffic in Arms Regulations (“ITAR”) administered by the U.S. Department of State and the Export Administration Regulations (“EAR”) administered by the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”). Pursuant to these foreign trade control laws and regulations, the Company may be required, among other things, to (i) maintain a registration under ITAR, (ii) determine the proper licensing jurisdiction and export classification of products, software, and technology, and (iii) obtain licenses or other forms of U.S. government authorization to engage in the conduct of the Company’s satellite imagery and data business. Violations of applicable export control laws and related regulations could result in criminal and administrative penalties, including fines, possible denial of export privileges, and debarment, which could have a material adverse impact on the Company’s business, including its ability to enter into contracts or subcontracts for U.S. government customers. U.S. export licenses are required to transfer or make accessible certain of the Company’s products, software and technical information to its non-U.S. employees (called “deemed exports”).

The inability to secure and maintain other necessary export authorizations could negatively impact the Company’s ability to compete successfully or to operate its business as planned. For example, if the Company was unable to obtain or maintain its licenses to export certain spacecraft hardware, it would effectively be prohibited from launching its vehicles from certain non-U.S. locations, which would limit the number of launch providers it could use. In addition, if the Company was unable to obtain a Department of State Technical Assistance Agreement to export certain launch related services, it would experience difficulties or even be unable to perform integration activities necessary to safely integrate its transfer vehicles to non-U.S. launch vehicles. In both cases, these restrictions could lead to higher launch costs which may have a material adverse impact on the Company’s results of operations. Similarly, if the Company was unable to secure effective export licensure to authorize the full scope of activity with a foreign partner or supplier, it may be required to make design changes to spacecraft or updates to its supplier chain, which may result in increased costs to the Company or delays in vehicle launches.

Any changes in the export control regulations or U.S. government licensing policy, such as those necessary to implement U.S. government commitments to multilateral control regimes, may restrict the Company’s operations. There is no inherent right to perform an export and given the significant discretion the government has adjudicating such authorizations in furtherance of U.S. national security and foreign policy interests, there can be no assurance the Company will be successful in its current and future efforts to secure and maintain necessary licenses, registrations, or other U.S. government regulatory approvals.

In addition, U.S. export control laws continue to change. For example, the control lists under the ITAR and the EAR are periodically updated to reclassify specific types of export-controlled technology. For example, any changes to the jurisdictional assignment of controlled data or hardware used by the Company could result in the need for different export authorizations, each then subject to a subsequent approval. Similarly, should exceptions or exemptions under the EAR or ITAR, respectively, be changed, the Company’s activities otherwise authorized via these mechanisms may become unavailable and could result in the need for additional export authorizations.

 

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Additionally, changes to the administrative implementation of export control laws at the agency level may suddenly change as a result of geo-political events, which could result in existing or proposed export authorization applications being viewed in unpredictable ways, or potentially rejected, as a result of the changed agency level protocol.

To date, based on the structure of the Company’s business and operations and informal discussion with regulators, the Company does not believe its satellite operations are subject to U.S. regulation. If it is determined by a U.S. regulatory authority that the Company’s operations are subject to U.S. law, the Company could be subject to penalties and other adverse consequences as a result of noncompliance.

The raw data collected by the Company’s constellation is collected through a series of ground stations strategically located in several global locations (not within the U.S.). The Company has a mission and operations team, located in Spain and Argentina, that monitors and operates all satellites in the constellation. The majority of the Company’s satellite operations and management sits outside the U.S. As a result of these factors, the Company does not believe it is subject to U.S. regulations issued by the U.S. National Oceanic and Atmospheric Administration (“NOAA”) or the U.S. Federal Aviation Administration (“FAA”), although the Company’s agreement with SpaceX to launch its satellites does indirectly require it to comply with certain FAA licensing requirements. If U.S. regulators disagree with the Company’s determination that it is not subject to U.S. regulation and it is determined by a U.S. regulatory authority that the Company was required to, and did not, comply with U.S. regulations relating to its business and operations, the Company may be subject to penalties or other adverse consequences which could materially and adversely affect the Company’s business and results of operations.

If the Company is successful in becoming a U.S. governmental contractor, its business will be subject to significant U.S. regulations, and reductions or changes in U.S. government spending, including the U.S. defense budget, could reduce its revenue and adversely affect its business.

A large part of the Company’s growth strategy includes obtaining U.S. governmental agency customers, particularly in defense and intelligence, as well as U.S. commercial customers. If and when the Company contracts with the U.S. government or, in certain circumstances, retains services from U.S. service providers, the Company must comply with a variety of laws and regulations. A violation of these laws and regulations could result in the imposition of fines and penalties to the Company or its customers or the termination of the Company’s or their contracts with the U.S. government. As a result, there could be a delay in the Company’s receipt of orders from its customers, a termination of such orders, or a termination of any contracts between the Company and the U.S. government.

 

   

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

 

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

 

   

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

 

   

The Company may enter into cost reimbursable contracts with the U.S. government or a defense prime contractor customer that could offset the Company’s cost efficiency initiatives.

 

   

The Company would be subject to various U.S. federal export-control statutes and regulations, which may affect its business with, among others, international defense customers. In certain cases, the export of the Company’s products and technical data to foreign persons, and the provision of technical services to foreign persons related to such products and technical data, may require licenses from the U.S. Department of Commerce or the U.S. Department of State. The time required to obtain these licenses, and the restrictions that may be contained in these licenses, may result in the Company being at a competitive disadvantage with international suppliers who are not subject to U.S. federal export control statutes and regulations. In addition, violations of these statutes and regulations can result in civil and, under certain circumstances, criminal liability as well as administrative penalties which could have a material adverse effect on the Company’s business, financial condition, and results of operations.

 

   

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

 

   

The Company may in the future derive a portion of its revenue from programs with governments and government agencies that are subject to security restrictions (e.g., contracts involving classified information, classified contracts, and classified programs), which preclude the dissemination of information and technology that is classified for national security purposes under applicable law and regulation. In general, access to classified information, technology, facilities, or programs requires appropriate personnel security clearances, is subject to additional contract oversight and potential liability, and may also require appropriate facility clearances and other specialized infrastructure. Therefore, certain of the Company’s employees with appropriate security clearances may require access to classified information in connection with the performance of a U.S. government contract. The Company must comply with security requirements pursuant to the National Industrial Security Program Operating Manual (“NISPOM”) administered by the Defense Counterintelligence and Security Agency (“DCSA”), and other U.S. government security protocols when accessing sensitive information. Failure to comply with the NISPOM or other security requirements may subject the Company to civil or criminal penalties, loss of access to sensitive information, loss of a U.S. government contract, or potentially debarment as a government contractor. Further, the DCSA has transitioned its review of a contractor’s security program to focus on the protection of controlled unclassified information and assets. Failure to meet DCSA’s new, broader requirements could adversely impact the ability to win new business as a government contractor.

 

   

The Company may need to invest additional capital to build out higher level security infrastructure at certain of its facilities to be awarded contracts related to defense programs with higher level security requirements. Failure to invest in such infrastructure may limit the Company’s ability to obtain new contracts with defense programs.

 

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The Company may be required to have certain products that it purchases manufactured in the United States and other relatively high-cost manufacturing locations under the Buy American Act or other regulations, and the Company may not manufacture all products in locations that meet these requirements, which may preclude the Company’s ability to sell some products or services

If the Company were to become a contractor to agencies and departments of the U.S. government, it would likely result in it being routinely subject to investigations and reviews relating to compliance with various laws and regulations, including those associated with organizational conflicts of interest, procurement integrity, bid integrity and claim presentation, among others. These investigations may be conducted without the Company’s knowledge. Adverse findings in these investigations or reviews can lead to criminal, civil or administrative proceedings, and the Company could face civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or debarment from doing business with U.S. government agencies. In addition, the Company could suffer serious harm to its reputation and competitive position if allegations of impropriety were made against it, whether or not true. If the Company’s reputation or relationship were impaired due to these investigations, or if it could not obtain contracts with the U.S. government and the U.S. government otherwise ceased doing business with it or significantly decreased the amount of business it does with it, its revenues and ability to attract new business could be adversely affected.

In addition, spending authorizations for defense-related and other programs by the U.S. government have fluctuated in the past, and future levels of expenditures and authorizations for these programs may decrease, remain constant or shift to programs in areas where the Company does not expect to provide services. Any contract the Company may enter into with the U.S. government and its agencies will generally be conditioned upon the continuing availability of Congressional appropriations. Congress usually appropriates funds on a fiscal year basis, even though contract performance may extend over many years. In recent years, there has been a pattern of delays in the finalization and approval of the U.S. government budget, which can create uncertainty over the extent of future U.S. government demand for the Company’s services.

Failure to comply with the requirements of the National Industrial Security Program could jeopardize the Company’s ability to provide its products and services to the U.S. government.

The Company’s growth strategy includes seeking U.S. governmental agency customers, particularly in defense and intelligence, though it has not acquired any U.S. governmental agency customers to date. In obtaining certain U.S. governmental agency customers, those contracts may require the Company to maintain national security clearance and mitigation elements under the National Industry Security Program. Obtaining and maintaining national security clearances involves a lengthy process. In anticipation of potential future U.S. government contracts, the Company established a U.S. subsidiary, Satellogic North America, LLC, and has commenced the process of insulating the entity from foreign ownership, control or influence (“FOCI”), including by recruiting directors and employees dedicated to that entity and any U.S. governmental agency projects to be serviced by the entity. Failure to comply with any agreement with the U.S. Department of Defense regarding any appropriate FOCI mitigation arrangement could result in invalidation or termination of applicable facility security clearances, which in turn would mean that Satellogic North America, LLC, would not be able to enter into future contracts with the U.S. government requiring facility security clearances, and may result in the loss of the ability of this entity or any other future U.S. subsidiaries to complete then-existing contracts with the U.S. government.

The Company’s business with governmental entities is subject to the policies, priorities, regulations, mandates, and funding levels of such governmental entities and may be negatively impacted by any change thereto.

The Company plans to enter into contracts with governmental agencies to provide its products and services. This would subject the Company’s business to laws and regulations applicable to companies doing business with the applicable government. These government contracts customarily contain provisions that give the government substantial rights and remedies, many of which are not typically found in commercial contracts and which are unfavorable to contractors.

 

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For instance, most government agencies include provisions that allow the government to unilaterally terminate or modify contracts for convenience, and in such event, the counterparty to the contract may generally recover only its incurred or committed costs and settlement expenses and profit on work completed prior to the termination. If the government terminates a contract for default, the defaulting party may be liable for any extra costs incurred by the government in procuring undelivered items from another source.

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

 

   

Terminate existing contracts for convenience with short notice;

 

   

Reduce orders under or otherwise modify contracts;

 

   

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

 

   

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

 

   

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

 

   

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

 

   

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

 

   

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

 

   

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

 

   

Suspend or debar the Company from doing business with the applicable government; and

 

   

Control or prohibit the export of its services.

In addition, government contracts normally contain additional requirements that may increase the Company’s costs of doing business, reduce its gross margins, and expose it to liability for failure to comply with these terms and conditions. These requirements include, for example:

 

   

Specialized disclosure and accounting requirements unique to government contracts;

 

   

Financial and compliance audits that may result in potential liability for price adjustments, recoupment of government funds after such funds have been spent, civil and criminal penalties, or administrative sanctions such as suspension or debarment from doing business with the U.S. government;

 

   

Public disclosures of certain contract and company information;

 

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Mandatory socioeconomic compliance requirements, including labor requirements, non-discrimination and affirmative action programs and environmental compliance requirements; and

 

   

Requirements to procure certain materials, components and parts from supply sources approved by the customer.

Government contracts are also generally subject to greater scrutiny by the government, which can initiate reviews, audits and investigations regarding the Company’s compliance with government contract requirements. New regulations or procurement requirements (including, for example regulations regarding counterfeit and corrupt parts, supply chain diligence and cybersecurity) or changes to current requirements could increase our costs and risk of non-compliance. In addition, if the Company fails to comply with government contracting laws, regulations and contract requirements, its contracts may be subject to termination, and it may be subject to financial and/or other liability under such contract and applicable law.

Further, changes in government policies, priorities, regulations, use of commercial data providers to meet U.S. government imagery needs, government agency mandates, funding levels through agency budget reductions, the imposition of budgetary constraints or a decline in government support or deferment of funding for programs in which the Company or its customers participate could result in contract terminations, delays in contract awards, reduction in contract scope, performance penalties or breaches of its contracts, the failure to exercise contract options, the cancellation of planned procurements and fewer new business opportunities, all of which could materially and adversely impact the Company’s business, financial condition, results of operations and cash flows.

The Company’s business is subject to a wide variety of additional extensive and evolving government laws and regulations. Failure to comply with such laws and regulations could have a material adverse effect on the Company’s business.

The Company is subject to a wide variety of laws and regulations relating to various aspects of its business, including with respect to its space transport operations, employment and labor, health care, tax, privacy and data security, health and safety, and environmental issues. Laws and regulations at the foreign, federal, state and local levels frequently change, especially in relation to new and emerging industries, and the Company cannot reasonably predict the impact from, or the ultimate cost of compliance with, current or future regulatory or administrative changes. The Company monitors these developments and devotes a significant amount of management’s time and external resources towards compliance with these laws, regulations and guidelines, and such compliance places a significant burden on management’s time and other resources, and it may limit the Company’s ability to expand into certain jurisdictions. Moreover, changes in law, the imposition of new or additional regulations or the enactment of any new or more stringent legislation that impacts the Company’s business could require the Company to change the way it operates and could have a material adverse effect on its sales, profitability, cash flows and financial condition. Failure to comply with these laws or regulations or failure to satisfy any criteria or other requirement under such laws or regulations, such as with respect to obtaining and maintaining licenses, certificates, authorizations and permits critical for the operation of the Company’s business, may result in civil penalties or private lawsuits, or result in a delay or the denial, suspension or revocation of licenses, certificates, authorizations or permits, which would prevent the Company from operating its business.

The U.S. and foreign governments may revise existing contract rules and regulations or adopt new contract rules and regulations at any time and may also face restrictions or pressure regarding the type and amount of services it may obtain from private contractors. Changes could impair the Company’s ability to obtain new contracts or renew contracts under which it currently performs when those contracts are eligible for re-competition. Any new contracting methods could be costly or administratively difficult for the Company to implement, which could adversely affect the Company’s business, results of operations and financial condition.

 

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Additionally, regulation of the Company’s industry is still evolving, and new or different laws or regulations could affect the Company’s operations, increase direct compliance costs for the Company or cause any third-party suppliers or contractors to raise the prices they charge the Company because of increased compliance costs. For example, the FCC has an open notice of proposed rulemaking relating to mitigation of orbital debris, which could affect the Company and its operations. The adoption of a multi-layered regulatory approach to any one of the laws or regulations to which the Company are or may become subject, particularly where the layers are in conflict, could require alteration of the Company’s manufacturing processes or operational parameters which may adversely impact its business. The Company may not be in compliance with all such requirements at all times and, even when it believes it is in compliance, a regulatory agency may determine that it is not.

Any changes in applicable laws could adversely affect the Company’s business and financial condition. Any material failure to comply with applicable laws could result in contract termination, price or fee reductions or suspension or debarment from contracting.

The Company is subject to the orbital slot and spectrum access requirements of the International Telecommunication Union (“ITU”) and the regulatory and licensing requirements in each of the countries in which it provides services, operates facilities, or licenses terminals, and the Company’s business is sensitive to regulatory changes internationally and in those countries.

The telecommunications industry is highly regulated, and the Company depends on access to orbital slots and spectrum resources to provide satellite services. The ITU and U.S. and other nations’ regulators allocate spectrum for satellite services, and may change these allocations, which could change or limit how the Company’s current satellites are able to be used. In addition, in connection with providing satellite capacity, ground network uplinks, downlinks and other value-added or managed services to the Company’s customers, the Company needs to maintain regulatory approvals, and from time to time obtain new regulatory approvals, from various countries. Obtaining and maintaining these approvals can involve significant time and expense. If the Company cannot obtain, or is delayed in obtaining, the required regulatory approvals, it may not be able to provide these services to its customers, operate facilities and terminals, or expand into new services. In addition, the laws and regulations to which the Company is subject could change at any time, thus making it more difficult for the Company to obtain new regulatory approvals or causing its existing approvals to be revoked or adversely modified. Because regulatory schemes vary by country, the Company may also be subject to regulations of which it is not presently aware and could be subject to sanctions by a foreign government that could materially and adversely affect its operations in that country. If the Company cannot comply with the laws and regulations that apply to it, it could lose its revenue from services provided to the countries and territories covered by these laws and regulations and be subject to criminal or civil sanctions.

Increasing regulatory focus on privacy issues and expanding laws may impact the Company’s business or expose it to increased liability.

The Company collects and processes customer data, which may include personal data. Due to the sensitivity of the information and data the Company expects to manage in the future, as well as the nature of its customer base, the security features of its information systems are critical. A variety of U.S. federal, state and foreign laws and regulations govern the collection, use, retention, sharing and security of this information. Laws and regulations relating to privacy, data protection and consumer protection are evolving and subject to potentially differing interpretations. These requirements may not be harmonized, may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or the Company’s practices. As a result, the Company’s practices may not have complied or may not comply in the future with all such laws, regulations, requirements and obligations.

The Company expects that new industry standards, laws and regulations will continue to be proposed regarding privacy, data protection and information security in many jurisdictions, including the European e-Privacy Regulation, which is currently in draft form. The Company cannot yet determine the impact such

 

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future laws, regulations and standards may have on its business. Complying with these evolving obligations is costly. For instance, expanding definitions and interpretations of what constitutes “personal data” (or the equivalent) within the United States, the European Economic Area (the “EEA”) and elsewhere may increase the Company’s compliance costs and legal liability.

The Company is also subject to additional privacy laws and regulations, many of which, such as the European Union’s General Data Protection Regulation (“GDPR”) and national laws supplementing the GDPR, as well as legislation substantially implementing the GDPR in the United Kingdom, are significantly more stringent than those currently in effect in the United States. The GDPR requires companies to meet stringent requirements regarding the handling of personal data of individuals located in the EEA. The law also includes significant penalties for noncompliance, which may result in monetary penalties of up to the higher of €20.0 million or 4% of a group’s worldwide turnover for the preceding financial year for the most serious violations. The United Kingdom’s version of the GDPR, the UK GDPR, which it maintains along with its Data Protection Act (collectively, the “UK GDPR”), also provides for substantial penalties that, for the most serious violations, can be the greater of £17.5 million or 4% of a group’s worldwide turnover for the preceding financial year. The GDPR, UK GDPR, and other similar regulations require companies to give specific types of notice and informed consent is required for certain actions, and the GDPR and UK GDPR imposes additional conditions in order to satisfy such consent, such as bundled consents.

The GDPR, UK GDPR, and other state and global laws and regulations have increased the Company’s responsibility and potential liability in relation to personal data, and the Company has and will continue to put in place additional processes and programs to demonstrate compliance. New privacy laws and regulations are under development at the U.S. federal and state level and in many international jurisdictions. Any actual or perceived failure to comply with the U.S., GDPR, UK GDPR, or other data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, could lead to investigations, claims, and proceedings by governmental entities and private parties, damages for contract breach, and other significant costs, penalties, and other liabilities, as well as harm to the Company’s reputation and market position.

Additionally, the Company stores customer information and content and if its customers fail to comply with their contractual obligations or applicable laws, it could result in litigation or reputational harm to the Company. The GDPR, UK GDPR, and other laws, regulations, standards and self-regulatory codes may affect the Company’s ability to reach current and prospective customers, understand how the Company’s offerings and services are being used, respond to customer requests allowed under the laws, and implement its new business models effectively. These new laws and regulations would similarly affect the Company’s competitors as well as its customers. These requirements could impact demand for the Company’s offerings and services and result in more onerous contract obligations.

Subsequent to the consummation of the Business Combination, PubCo will be subject to anti-corruption and anti-bribery laws in various countries, including but not limited to the U.S. Foreign Corrupt Practices Act. PubCo can be subject to criminal and civil liability and other serious consequences for violations of such laws, which can harm its business.

PubCo will be subject to applicable anti-corruption and anti-bribery laws, including but not limited to the U.S. Foreign Corrupt Practices Act of 1977, as amended (“FCPA”), and other anti-corruption, anti-bribery, and related laws in countries in which PubCo will conduct its activities. PubCo can, in certain circumstances, be held liable for violations of such laws committed by its employees, agents, contractors and others acting on its behalf, even if PubCo does not explicitly authorize or have actual knowledge of such activities. PubCo can also, in certain circumstances, be held liable for prior violations of such laws committed by the Company. Any violations of these laws and regulations may result in substantial civil, criminal and administrative fines and penalties, remedial measures and legal expenses, and other collateral consequences, all of which could adversely affect PubCo’s business, results of operations, financial condition and reputation.

 

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Although the Company maintains anti-corruption policies and procedures designed to address the risk of bribery, corruption and related misconduct, certain of its activities and operations present risk from an anti-corruption perspective. The Company has an extensive current or projected geographic scope of operations and is active or pursuing business in countries that can present heightened anti-corruption compliance risks. The Company’s target customer base also includes governments and government instrumentalities. Contracting with such entities can increase a company’s compliance risk exposure, since, among other things, the representatives of such entities are typically considered to be “foreign officials” under the FCPA and may be similarly characterized under other relevant anti-corruption laws. The Company also works with third parties, including business development agents, distributors and resellers, in certain countries, including to interact with public officials on the Company’s behalf. As PubCo’s operations and sales activities continue to expand, PubCo’s policies and procedures will similarly have to expand to adequately address the risks presented by its activities. PubCo may fail to adequately expand its policies and procedures to address these increased risks.

Risks Relating to the Company’s Intellectual Property, Data Privacy and Information Security

The Company may be unable to protect its intellectual property rights. Disclosure of trade secrets could cause harm to the Company’s business.

To protect the Company’s proprietary rights, it relies on a combination of patents, trademarks and trade secret laws, and confidentiality agreements and license agreements with consultants, vendors and customers. The Company’s efforts to protect its intellectual property and proprietary rights may not be sufficient. Although the Company applies rigorous standards, documents and processes to protect its intellectual property, there is no absolute assurance that the steps taken to protect its technology will prevent misappropriation or infringement. The Company’s ability to enforce and protect its intellectual property rights may be limited in certain jurisdictions, which could make it easier for competitors to capture market position in such countries by utilizing technologies that are similar to those developed or licensed by the Company. Competitors also may harm the Company’s sales by designing products that mirror the capabilities of its products or technology without infringing on its intellectual property rights. If the Company does not obtain sufficient protection for its intellectual property, or if it is unable to effectively enforce its intellectual property rights, the Company’s competitiveness could be impaired, which would limit its growth and future revenue.

The Company attempts to protect its trade secrets and other proprietary information by entering into confidentiality, licensing and invention assignment agreements or other contracts with similar provisions with third parties and its employees and consultants. However, these agreements can be breached and, if they are, there may not be an adequate remedy available to the Company. In addition, others may independently discover, or reverse engineer the Company’s trade secrets and proprietary information, and in such cases the Company could not assert any trade secret or proprietary rights against such party. Litigation may be necessary to enforce or protect the Company’s intellectual property rights, its trade secrets or determine the validity and scope of the proprietary rights of others. Litigating a claim that a party illegally or unlawfully obtained and uses the Company’s trade secret without authorization is difficult, expensive and time consuming, and the outcome is unpredictable. If the Company is unable to protect its intellectual property, its competitors could market services or products similar to the Company’s services and products, which could reduce demand for its offerings. Any litigation to enforce the Company’s intellectual property rights, protect its trade secrets or determine the validity and scope of the proprietary rights of others could result in substantial costs and diversion of resources, with no assurance of success.

The Company also tries to protect its intellectual property by filing patent applications related to its technology, inventions and improvements are important to the development of its business. The steps the Company takes to protect its intellectual property may be inadequate. The Company currently has 14 issued patents, one utility model and 37 patents pending in 8 jurisdictions. The Company’s pending patent applications may not result in patents being issued, which may have a material adverse effect on its ability to prevent others from commercially exploiting products similar to those of the Company. The Company cannot be certain that it

 

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is the first inventor of the subject matter to which it has filed a particular patent application, or if it is the first party to file such a patent application. If another party has filed a patent application to the same subject matter as the Company has, the Company may not be entitled to the protection sought by the patent application. The Company also cannot be certain whether the claims included in a patent application will ultimately be allowed in the applicable issued patent. As a result, the Company cannot be certain that the patent applications that it files will be granted. Further, the scope of protection of issued patent claims is often difficult to determine.

Patents, if issued, may be challenged, invalidated or circumvented. If the Company’s patents are invalidated or found to be unenforceable, the Company will lose the ability to exclude others from making, using or selling the inventions claimed. Moreover, an issued patent does not guarantee the Company the right to use the patented technology or commercialize a product using that technology. Third parties may have blocking patents that could be used to prevent the Company from developing its product. Thus, patents that the Company may own in the future may not allow it to exploit the rights conferred by its intellectual property protection. Even if issued, they may not be issued with claims sufficiently broad to protect the Company’s technologies or may not provide the Company with a competitive advantage against competitors with similar technologies. Despite the Company’s precautions, it may be possible for unauthorized third parties to copy the Company’s technology and use information that the Company regards as proprietary to create technology that competes with the Company’s. Further, the laws of certain countries may not adequately protect proprietary rights, and mechanisms for enforcement of intellectual property rights in such countries may be inadequate. The Company’s competitors may also design around the Company’s issued patents, which may adversely affect the Company’s business, prospects, financial condition and operating results.

The Company’s technology may violate the proprietary rights of third parties and its intellectual property may be misappropriated or infringed upon by third parties, each of which could have a negative impact on its operations.

If any of the Company’s technology violates proprietary rights of any third party, including copyrights and patents, such third party may assert infringement claims against the Company. Certain software and other intellectual property used by the Company or in its satellites, systems and products make use of or incorporate licensed software components or other licensed technology. Any claims brought against the Company may result in limitations on its ability to use the intellectual property subject to these claims. The Company may be required to redesign its satellites, systems or products or to obtain licenses from third parties to continue offering its satellites, systems or products without substantially re-engineering such products or systems.

The Company’s intellectual property rights may be invalidated, circumvented, challenged, infringed or required to be licensed to others. An infringement or misappropriation could harm any competitive advantage the Company currently derives or may derive from its proprietary rights.

Data breaches or incidents involving the Company’s technology or products could damage its business, reputation and brand and substantially harm its business and results of operations.

If the Company’s data and network infrastructure were to fail, or if the Company were to suffer an interruption or degradation of services in its data center, third-party cloud, and other infrastructure environments, it could lose important manufacturing and technical data, which could harm its business. The Company’s facilities, as well as the facilities of third parties that maintain or have access to the Company’s data or network infrastructure, are vulnerable to damage or interruption from earthquakes, hurricanes, floods, fires, cyber security attacks, terrorist attacks, power losses, telecommunications failures and similar events. In the event that the Company’s or any third-party provider’s systems or service abilities are hindered by any of the events discussed above, the Company’s ability to operate may be impaired and its business could be adversely affected. A decision to close facilities without adequate notice, or other unanticipated problems, could adversely impact the Company’s operations. Any of the aforementioned risks may be augmented if the Company’s or any third-party provider’s business continuity and disaster recovery plans prove to be inadequate. The Company’s data center,

 

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third-party cloud, and managed service provider infrastructure also could be subject to break-ins, cyber-attacks, sabotage, intentional acts of vandalism and other misconduct, from a spectrum of actors ranging in sophistication from threats common to most industries to more advanced and persistent, highly organized adversaries. Any security breach, including personal data breaches, or incident, including cybersecurity incidents, that the Company experiences could result in unauthorized access to, misuse of or unauthorized acquisition of its internal sensitive corporate data, such as financial data, intellectual property, or data related to contracts with commercial or government customers or partners. Such unauthorized access, misuse, acquisition, or modification of sensitive data may result in data loss, corruption or alteration, interruptions in the Company’s operations or damage to the Company’s computer hardware or systems or those of its employees and customers. Moreover, negative publicity arising from these types of disruptions could damage the Company’s reputation.

The Company has implemented multiple layers of security measures designed to protect the confidentiality, integrity, availability and privacy of this data and the systems and devices that store and transmit such data. The Company utilizes current security technologies, and its defenses are monitored and routinely tested internally. Despite these efforts, threats from malicious persons and groups, new vulnerabilities and advanced new attacks against information systems create risk of cybersecurity incidents. These incidents can include, but are not limited to, gaining unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may not immediately produce signs of intrusion, the Company may be unable to anticipate these incidents or techniques, timely discover them, or implement adequate preventative measures.

Over the past several years, cyber-attacks have become more prevalent and much harder to detect and defend against. The Company’s network and storage applications may be vulnerable to cyber-attack, malicious intrusion, malfeasance, loss of data privacy or other significant disruption and may be subject to unauthorized access by hackers, employees, consultants or other service providers. In addition, hardware, software or applications the Company develops or procures from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Unauthorized parties may also attempt to gain access to the Company’s systems or facilities through fraud, trickery or other forms of deceiving the Company’s employees, contractors and temporary staff. As cyber threats continue to evolve, the Company may be required to expend significant additional resources to continue to modify or enhance its protective measures or to investigate and remediate any cybersecurity vulnerabilities. The Company expects to maintain cyber liability insurance policies covering certain security and privacy damages. However, it does not currently have a policy and even if a policy is purchased, the Company cannot be certain that its coverage will be adequate for liabilities actually incurred or that insurance will continue to be available to it on economically reasonable terms, or at all.

Significant unavailability of the Company’s services due to attacks could cause users to cease using the Company’s services and materially adversely affect the Company’s business, prospects, financial condition and results of operations. The Company uses software which it has developed, which the Company seeks to continually update and improve. Replacing such systems is often time-consuming and expensive and can also be intrusive to daily business operations. Further, the Company may not always be successful in executing these upgrades and improvements, which may occasionally result in a failure of its systems. The Company may experience periodic system interruptions from time to time. Any slowdown or failure of the Company’s underlying technology infrastructure could harm its business, reputation and ability to execute on its business plan, which could materially adversely affect its results of operations. The Company’s disaster recovery plan or those of its third-party providers may be inadequate.

The Company’s technologies contain “open source” software, and any failure to comply with the terms of one or more of these open source licenses could negatively affect its business.

The Company utilizes “open-source” software licensed from third parties on a limited basis. The Company primarily uses this software in limited cases such as in connection with satellite testing. Some of these licenses

 

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contain requirements that the Company make available source code for modifications or derivative works it creates based upon the open source software, and that it license these modifications or derivative works under the terms of a particular open source license or other license granting third-parties certain rights of further use. In addition to risks related to license requirements, use of open source software can lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide updates, warranties, support, indemnities, assurances of title, or controls on origin of the software. Likewise, some open source projects have known security and other vulnerabilities and architectural instabilities, or are otherwise subject to security attacks due to their wide availability, and are provided on an “as-is” basis. If the Company were found to have inappropriately used open source software, it may be required to take other remedial action that may divert resources away from its development efforts, any of which could adversely affect its business, financial condition, results of operations and growth prospects. In addition, if the open source software the Company uses is no longer maintained by the relevant developer or open source community, then it may be more difficult to make the necessary revisions to the Company’s software, including modifications to address security vulnerabilities, which could impact the Company’s ability to mitigate cybersecurity risks or fulfill its contractual obligations to its customers. The Company may also face claims from others seeking to enforce the terms of an open source license, including by demanding release under certain open source licenses of the open source software, derivative works or the Company’s proprietary source code that was developed using such software. Such claims, with or without merit, could result in litigation, could be time-consuming and expensive to settle or litigate, could divert the Company’s management’s attention and other resources, could require the Company to lease some of the Company’s proprietary code, or could require the Company to devote additional research and development resources to change its technologies, any of which could adversely affect its business.

General Business Risks

The global COVID-19 outbreak has affected the Company’s business and operations.

In light of the uncertain and rapidly evolving situation relating to the spread of COVID-19, the Company has taken precautionary measures intended to minimize the risk of the virus to its employees, customers, and the communities in which it operates, which may negatively impact its business.

COVID-19 has had a negative impact on certain of the Company’s operations, supply chain, vendors, transportation networks and customers. The COVID-19 outbreak is a widespread public health crisis that is adversely affecting the economies and financial markets globally. The progression of this pandemic could negatively impact the Company’s business or results of operations through the temporary or extended closure of its operating locations or those of its suppliers. In addition, there may be changes in the Company’s potential customers’ priorities and practices, as they confront competing budget priorities and limited resources. These changes may impact current and future programs, customer priorities, government payments, and other practices, procurements, and funding decisions.

To the extent COVID-19 adversely affects the Company’s business operations, liquidity and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section.

The Company relies on the significant experience and specialized expertise of its senior management, engineering, sales and operational staff and must retain and attract qualified and highly skilled personnel in order to grow its business successfully. If the Company is unable to build, expand, and deploy additional members its management, engineering, sales and operational staff in a timely manner, or at all, or to hire, retain, train, and motivate such personnel, its growth and long-term success could be adversely impacted.

The Company’s performance is substantially dependent on the continued services and performance of its senior management and its highly qualified team of engineers and data scientists, many of whom have numerous years of experience, specialized expertise in its business. If the Company is not successful in hiring and retaining

 

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highly qualified engineers, data scientists and other skilled personnel, it may not be able to extend or maintain its engineering and data science expertise, and its future product development efforts could be adversely affected. Competition for hiring these employees is intense, especially regarding engineers and data scientists with specialized skills required for the Company’s business, and it may be unable to hire and retain enough engineers and data scientists to implement its growth strategy.

The Company’s future success also depends on the successful execution of its strategy to increase sales to customers, identify and engage new customers, and enter U.S. and new non-U.S. markets, which will depend on, among other things, its ability to build and expand its sales organization and operations. Identifying, recruiting, training, and managing sales personnel requires significant time, expense, and attention, including from the Company’s senior management and other key personnel, which could adversely impact its business, financial condition, and results of operations in the short and long term.

The Company may become involved in litigation that may materially adversely affect it.

From time to time, the Company may become involved in various legal proceedings relating to matters incidental to the ordinary course of its business, including intellectual property, commercial, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources, cause the Company to incur significant expenses or liability or require it to change its’ business practices. Because of the potential risks, expenses and uncertainties of litigation, the Company may, from time to time, settle disputes, even where it believes that it has meritorious claims or defenses. Because litigation is inherently unpredictable, the Company cannot assure you that the results of any of these actions will not have a material adverse effect on its business.

Changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies could adversely affect the Company’s financial condition and results of operations.

The Company’s accounting policies and methods are fundamental to how it records and reports its financial condition and results of operations. Future changes in accounting standards, pronouncements or interpretations could require the Company to change its policies and procedures. The materiality of such changes is difficult to predict, and such changes could materially impact how the Company records and reports its financial condition and results of operations. In addition, some accounting policies require the use of estimates and assumptions that may affect the reported value of the Company’s assets or liabilities and results of operations and are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain. If those assumptions, estimates or judgments were incorrectly made, the Company could be required to correct and restate prior period financial statements, and there can be no assurances that it will make the correct judgments in the future, should any new standards be issued. Accounting standard-setters and those who interpret the accounting standards may also amend or even reverse their previous interpretations or positions on how various standards should be applied. Any of these changes are difficult to predict and can materially impact how the Company records and reports its financial condition and results of operations, which could have a significant impact on its future financial statements.

Risk Related to CF V and the Business Combination

The Sponsor and each of CF V’s officers and directors have agreed to vote in favor of the Proposals, including the Business Combination Proposal, to be presented at the Special Meeting, regardless of how CF V’s public stockholders vote.

The Sponsor and each of CF V’s officers and directors have agreed to, among other things, vote in favor of the Proposals, including the Business Combination Proposal, to be presented at the Special Meeting. As of the date of this proxy statement/prospectus, the Sponsor and CF V’s directors and officers own an aggregate of

 

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21.5% of the outstanding shares of CF V Common Stock. Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if the Sponsor and CF V’s directors and officers agreed to vote their Founder Shares and their other shares of CF V Common Stock in accordance with the majority of the votes cast by CF V’s public stockholders.

Neither the CF V Board nor any committee thereof obtained a fairness opinion in determining whether or not to pursue the Business Combination.

Neither the CF V Board nor any committee thereof is required to obtain an opinion from an independent investment banking or accounting firm that the price that CF V is paying for the Company in the Business Combination is fair to CF V from a financial point of view. In analyzing the Business Combination, the CF V Board conducted due diligence on the Company. The CF V Board also consulted with CF V’s management and legal counsel, financial advisors and other advisors and considered a number of factors, uncertainty and risks, including, but not limited to, those discussed under “The Business Combination Proposal—CF V Board’s Reasons for the Approval of the Business Combination,” and concluded that the business combination was in the best interest of CF V Stockholders. The CF V Board believes that because of the financial skills and background of its directors, it was qualified to conclude that the Business Combination was fair from a financial perspective to its stockholders and that the Company’s fair market value was at least 80% of the value of the Trust Account (excluding any taxes payable on interest earned). Accordingly, investors will be relying solely on the judgment of the CF V Board in valuing the Company, and the CF V Board may not have properly valued such businesses. As a result, the terms may not be fair from a financial point of view to the public stockholders. The lack of a fairness opinion may also lead an increased number of CF V Stockholders to vote against the Business Combination or demand redemption of their shares of CF V Common Stock, which could potentially impact CF V’s ability to consummate the Business Combination.

Since the Sponsor and CF V’s officers and directors have interests that are different, or in addition to (and which may conflict with), the interests of CF V Stockholders, a conflict of interest may have existed in determining whether the Business Combination is appropriate as CF V’s initial business combination. Such interests include that the Sponsor will lose its entire investment in CF V if a business combination is not completed. Accordingly, CF V’s officers and directors may be incentivized to complete an initial business combination, even on terms less favorable to CF V’s stockholders than liquidating CF V.

When you consider the recommendation of the CF V Board in favor of approval of the Proposals, including the Business Combination Proposal, you should keep in mind that the Sponsor and CF V’s officers and directors have interests that are different from, or in addition to, those of CF V Stockholders and warrant holders generally. The CF V Board was aware of and considered these interests, among other matters, in evaluating and negotiating the Business Combination and transaction agreements and in recommending to CF V Stockholders that they vote in favor of the Proposals presented at the Special Meeting, including the Business Combination Proposal. CF V Stockholders should take these interests into account in deciding whether to approve the Proposals, including the Business Combination Proposal. These interests include, among other things:

 

   

CF V’s Existing Charter provides that the doctrine of corporate opportunity will not apply with respect to any of its officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, except as set forth in the Existing Charter. CF V does not believe that the pre-existing fiduciary duties or contractual obligations of its officers and directors materially impacted its search for an acquisition target. In the course of their other business activities, CF V’s officers and directors may become aware of other investment and business opportunities which may be appropriate for presentation to CF V as well as the other entities with which they are affiliated. CF V’s management has pre-existing fiduciary duties and contractual obligations and if there is a conflict of interest in determining to which entity a particular business opportunity should be presented, any pre-existing fiduciary obligation will be presented the opportunity before CF V is presented with it;

 

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unless CF V consummates an initial business combination, CF V’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them on behalf of CF V (no such expenses were incurred that had not been reimbursed as of September 30, 2021) to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;

 

   

the CF V Placement Units, including the CF V Placement Shares, and CF V Placement Warrants, purchased by the Sponsor for $6.0 million will be worthless if a business combination is not consummated;

 

   

the Sponsor has agreed that the CF V Placement Units, and all of their underlying securities, will not be sold or transferred by it until 30 days after CF V has completed a business combination, subject to limited exceptions;

 

   

the fact that Sponsor paid $25,000 or approximately $0.003 per share for the Founders Shares (of which it currently holds 6,230,000), which such Founder Shares, if unrestricted and freely tradeable, would be valued at approximately $61.7 million, based on the closing price of CF V Class A Common Stock on October 11, 2021, and that such shares will be worthless if a business combination is not consummated and that the Sponsor and its affiliates can earn a positive rate of return on their investment even if CF V’s public stockholders experience a negative return following the consummation of the Business Combination;

 

   

the fact that Sponsor has agreed not to redeem any of the Founders Shares or CF V Placement Shares in connection with a stockholder vote to approve a proposed initial business combination;

 

   

if CF V does not complete an initial business combination by February 2, 2023 (or a later date approved by CF V Stockholders pursuant to the CF V Charter), the proceeds from the sale of the CF V Placement Units of $6.0 million will be included in the liquidating distribution to CF V’s public stockholders and the CF V Placement Warrants will expire worthless;

 

   

the fact that upon completion of the Business Combination, a business combination marketing fee of $8.75 million, $5.0 million of M&A advisory fees (which will be $8.0 million if the Available Cash at Closing exceeds $295.0 million), and approximately $2.2 million of placement agent fees will be payable to CF&Co., an affiliate of CF V and the Sponsor;

 

   

if the Trust Account is liquidated, including in the event CF V is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify CF V to ensure that the proceeds in the Trust Account are not reduced below $10.00 per CF V Public Share by the claims of prospective target businesses with which CF V has entered into an acquisition agreement or claims of any third party for services rendered or products sold to CF V, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the fact that the Sponsor has agreed to invest up to an aggregate of up to $23.2 million in the PIPE Investment on the same terms as the PIPE Investors;

 

   

as further described in the section entitled “Certain Relationships and Related Person Transactions—The Company—Financing Engagement Letter”, the Company has engaged CF&Co. to assist it with any debt financings contemplated by the Company and agreed to pay CF&Co. fees in connection with those debt financings, which debt financings may be sought prior to or following the consummation of the proposed Business Combination;

 

   

the fact that in connection with the IPO, the Sponsor agreed, upon closing of CF V’s initial business combination, to invest $10.0 million in exchange for the Forward Purchase Securities (comprised of 1,250,000 PubCo Class A Ordinary Shares and 333,333 PubCo Warrants), which, assuming a $10.00 share price and a $1.50 warrant price, would represent a discount of approximately 23% to the price being paid by the PIPE Investors for the PIPE Shares being issued;

 

   

the fact that the Sponsor, through its participation in the PIPE Investment and purchase of Forward Purchase Securities, will be entitled to receive PIPE Additional Shares and FPC Additional Shares if

 

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the Adjustment Period VWAP is less than $10.00 (up to a maximum of 579,193 PIPE Additional Shares and 250,000 FPC Additional Shares if the Adjustment Period VWAP is less than $8.00), in which case, the Sponsor would also forfeit 143,376 PubCo Ordinary Shares received in exchange for its Founder Shares pursuant to the Merger Agreement (in which case the Sponsor will have a right to earn back a number of PubCo Ordinary Shares equal to such forfeited shares). Based on the closing price of CF V Class A Common Stock on September 30, 2021, 33,503 Additional Shares would be issued to the Sponsor;

 

   

the fact that the Sponsor has made outstanding loans to CF V in the aggregate amount of $1,197,223 as of September 30, 2021, which amount the Sponsor will lose to the extent that CF V is unable to repay such loans if the amount of such loans exceeds the amount of available proceeds not deposited in the Trust Account if an initial business combination is not completed;

 

   

the fact that CF V’s two independent directors own an aggregate of 20,000 Founder Shares that were transferred by the Sponsor at no cost, which if unrestricted and freely tradeable would be valued at $198,200, based on the closing price of CF V Class A Common Stock on October 11, 2021; and

 

   

the fact that CF V’s existing officers and directors will be eligible for continued indemnification and continued coverage under a directors’ and officers’ liability insurance policy after the business combination and pursuant to the Merger Agreement.

The existence of financial and personal interests of one or more of CF V’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of CF V and its stockholders and what he or they may believe is best for himself or themselves in determining to recommend that stockholders vote for the Proposals. See the section titled “The Business Combination Proposal—Interests of the Sponsor and CF V’s Directors, Officers and Affiliates in the Business Combination” for a further discussion of these considerations.

The financial and personal interests of the Sponsor and CF V’s officers and directors may have influenced their motivation in identifying and selecting the Company as a business combination target, completing an initial business combination with the Company and influencing the operation of the business following the initial business combination. In considering the recommendations of the CF V Board to vote for the Proposals, its stockholders should consider these interests. The existence of the interests described above may result in a conflict of interest on the part of CF V’s officers and directors in entering into the Merger Agreement and making their recommendation that you vote in favor of the approval of the Business Combination. In particular, the existence of the interests described above may incentivize CF V’s officers and directors to complete an initial business combination, even if on terms less favorable to CF V’s stockholders compared to liquidating CF V, because, among other things, if CF V is liquidated without completing an initial business combination, the Sponsor’s Founder Shares and CF V Placement Units would be worthless (which, if unrestricted and freely tradable, would be worth an aggregate of approximately $67.9 million based on the closing price of CF V Class A Common Stock and CF V Units on October 11, 2021), out-of-pocket expenses advanced by the Sponsor and loans made by the Sponsor to CF V would not be repaid to the extent such amounts exceed cash held by CF V outside of the Trust Account (which such expenses and loans, as of September 30, 2021, amounted to $1,197,223), and CF&Co. would not receive business combination marketing fees, M&A advisory fees and placement agent fees amounting to $15.95 million, in the aggregate.

There are risks to CF V Stockholders who are not affiliates of the Sponsor of becoming shareholders of PubCo through the Business Combination rather than acquiring securities of the Company directly in an underwritten public offering, including no independent due diligence review by an underwriter and conflicts of interest of the Sponsor.

Because there is no independent third-party underwriter involved in the Business Combination or the issuance of PubCo Ordinary Shares and PubCo Warrants in connection therewith, investors will not receive the benefit of any outside independent review of CF V’s and the Company’s respective finances and operations.

 

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Underwritten public offerings of securities conducted by a licensed broker-dealer are subjected to a due diligence review by the underwriter or dealer manager to satisfy statutory duties under the Securities Act, the rules of Financial Industry Regulatory Authority, Inc. (“FINRA”) and the national securities exchange where such securities are listed. Additionally, underwriters or dealer-managers conducting such public offerings are subject to liability for any material misstatements or omissions in a registration statement filed in connection with the public offering. As no such review will be conducted in connection with the Business Combination, CF V Stockholders must rely on the information in this proxy statement/prospectus and will not have the benefit of an independent review and investigation of the type normally performed by an independent underwriter in a public securities offering. Although CF V performed a due diligence review and investigation of the Company in connection with the Business Combination, CF V has different incentives and objectives in the Business Combination than an underwriter would in a traditional initial public offering. The lack of an independent due diligence review and investigation may increase the risk of an investment in PubCo because it may not have uncovered facts that would be important to a potential investor.

In addition, because PubCo will not become a public reporting company by means of a traditional underwritten initial public offering, securities or industry analysts may not provide, or may be less likely to provide, coverage of PubCo. Investment banks may also be less likely to agree to underwrite securities offerings on behalf of PubCo than they might if PubCo became a public reporting company by means of a traditional underwritten initial public offering, because they may be less familiar with PubCo as a result of more limited coverage by analysts and the media. The failure to receive research coverage or support in the market for the PubCo’s Ordinary Shares could have an adverse effect on PubCo’s ability to develop a liquid market for PubCo’s Ordinary Shares. See “— Risks Related to PubCo — If, following the Business Combination, securities or industry analysts do not publish or cease publishing research or reports about PubCo, its business, or its market, or if they change their recommendations regarding PubCo’s securities adversely, the price and trading volume of PubCo’s securities could decline.”

Certain of CF V’s officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by CF V and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.

Until CF V consummates its initial business combination, it intends to engage in the business of identifying and combining with one or more businesses. The Sponsor and CF V’s officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business, including other special purpose acquisition companies with a class of securities registered under the Exchange Act.

CF V’s officers and directors also may become aware of business opportunities which may be appropriate for presentation to CF V and the other entities to which they owe certain fiduciary or contractual duties. The CF V Charter provides that it renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as CF V’s director or officer and such opportunity is one CF V is legally and contractually permitted to undertake and would otherwise be reasonable for CF V to pursue, and to the extent the director or officer is permitted to refer that opportunity to CF V without violating any legal obligation.

In the absence of the “corporate opportunity” waiver in the CF V Charter, certain candidates would not be able to serve as an officer or director. CF V believes it substantially benefits from having representatives who bring significant, relevant and valuable experience to its management, and, as a result, the inclusion of the “corporate opportunity” waiver in the CF V Charter provides it with greater flexibility to attract and retain the officers and directors that it feels are the best candidates.

 

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However, the personal and financial interests of CF V’s directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination. The different timelines of competing business combinations could cause CF V’s directors and officers to prioritize a different business combination over finding a suitable acquisition target for CF V’s business combination. Consequently, CF V’s directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in CF V Stockholders’ best interest, which could negatively impact the timing for a business combination. CF V is not aware of any such conflicts of interest and does not believe that any such conflicts of interest impacted CF V’s search for an acquisition target.

The business combination marketing fee incurred in connection with the IPO and payable at the consummation of CF V’s initial business combination will not be adjusted to account for redemptions by CF V Stockholders; if CF V Stockholders exercise their redemption rights, the amount of the business combination marketing fee payable to CF&Co. as a percentage of the aggregate proceeds from the IPO will increase.

CF&Co., an affiliate of CF V, is entitled to a business combination marketing fee of $8,750,000 upon the consummation of CF V’s initial business combination, which is being held in the Trust Account until the consummation of CF V’s initial business combination. Such amount will not be adjusted to account for redemptions of CF V Public Shares. Accordingly, the business combination marketing fee payable upon consummation of the initial business combination as a percentage of the aggregate proceeds from the IPO will increase as the number of CF V Public Shares redeemed increases. If no CF V Stockholders exercise redemption rights with respect to their CF V Public Shares, the amount of the business combination marketing fee due to CF&Co. upon the consummation of CF V’s initial business combination will represent 3.5% of the aggregate gross proceeds from the IPO. If CF V Stockholders exercise redemption rights with respect to 12.5 million CF V Public Shares or 6.25 million CF V Public Shares, representing the “maximum redemptions” and “50% of maximum redemptions” scenarios described in this proxy statement/prospectus, the amount of the business combination marketing fee due to CF&Co. upon the consummation of CF V’s initial business combination will represent 7.0% or approximately 4.67%, respectively, of the aggregate gross proceeds from the IPO, taking into account such redemptions at an assumed redemption amount of $10.00 per share.

The exercise of the CF V Board’s discretion in agreeing to changes or waivers in the terms of the Merger Agreement and related agreements, including Closing conditions, may result in a conflict of interest when determining whether such changes to the terms or waivers of conditions are appropriate and in CF V Stockholders’ best interest.

In the period leading up to the Closing, events may occur that, pursuant to the Merger Agreement, would require CF V to agree to amend the Merger Agreement, to consent to certain actions taken by the Company or to waive rights that CF V is entitled to under the Merger Agreement, including those related to Closing conditions. Such events could arise because of changes in the course of the Company’s businesses or a request by CF V to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on the Company’s business and would entitle CF V to terminate the Merger Agreement. In any of such circumstances, it would be at CF V’s discretion, acting through the CF V Board, to grant its consent or waive those rights. The existence of financial and personal interests of one or more of the directors described in the preceding risk factors (and described elsewhere in this proxy statement/prospectus) may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for CF V and its stockholders and what he, she or they may believe is best for himself, herself or themselves in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, CF V does not believe there will be any changes or waivers that the CF V Board would be likely to make after stockholder approval of the Business Combination Proposal has been obtained. While certain changes could be made without further stockholder approval, CF V will circulate a new or amended proxy statement/prospectus and resolicit CF V Stockholders if changes to the terms of the transaction that would have a material impact on its stockholders are required prior to the vote on the Business Combination Proposal.

 

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While CF V and the Company work to complete the Business Combination, the Company’s management’s focus and resources may be diverted from operational matters and other strategic opportunities.

Successful completion of the Business Combination may place a significant burden on management and other internal resources of the Company. The diversion of management’s attention and any difficulties encountered in the transition process could harm the Company’s business, financial condition, results of operations and prospects and PubCo’s following the Business Combination. In addition, uncertainty about the effect of the Business Combination on the Company’s employees, consultants, customers, suppliers, partners, and other third parties, including regulators, may have an adverse effect on PubCo following the Business Combination. These uncertainties may impair PubCo’s ability to attract, retain and motivate key personnel for a period of time after the completion of the Business Combination.

Subsequent to consummation of the Business Combination, PubCo may be exposed to unknown or contingent liabilities and may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on PubCo’s financial condition, results of operations and the price of its securities, which could cause you to lose some or all of your investment.

CF V cannot assure you that the due diligence conducted in relation to the Company has identified all material issues or risks associated with the Company, its business or the industry in which it competes. Furthermore, CF V cannot assure you that factors outside of the Company’s and CF V’s control will not later arise. As a result of these factors, PubCo may be exposed to liabilities and incur additional costs and expenses and it may be forced to later write down or write off assets, restructure its operations, or incur impairment or other charges that could result in PubCo reporting losses. Even if CF V’s due diligence has identified certain risks, unexpected risks may arise, and previously known risks may materialize in a manner not consistent with its preliminary risk analysis. If any of these risks materialize, this could have a material adverse effect on PubCo’s financial condition and results of operations and could contribute to negative market perceptions about PubCo or its securities, including the PubCo Ordinary Shares. Additionally, neither CF V nor PubCo have indemnification rights against the Company Shareholders under the Merger Agreement and all of the purchase price consideration will be delivered to the Company Shareholders at the Closing, subject to escrow and potential forfeiture in accordance with section titled “—Forfeiture of Sponsor and Company Shareholder Escrowed Shares; Earnout” below. Accordingly, any stockholders or warrant holders of CF V who choose not to redeem or otherwise dispose of their CF V Common Stock or CF V Warrants will become PubCo shareholders and warrant holders following the Business Combination, and could suffer a reduction in the value of their PubCo Ordinary Shares or PubCo Warrants. Such shareholders or warrant holders are unlikely to have a remedy for such reduction in value.

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

Following the consummation of the Business Combination, PubCo will face a significant increase in insurance, legal, accounting, administrative and other costs and expenses as a public company that the Company does not incur as a private company. The Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board, the SEC and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements will require PubCo to carry out activities the Company has not done previously. For example, PubCo will create new board committees and adopt new internal controls and disclosure controls and procedures. In addition, additional expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if the auditors identify a material weakness or significant deficiency in the internal control over financial reporting), PubCo could incur additional costs

 

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rectifying those issues, and the existence of those issues could adversely affect PubCo’s reputation or investor perceptions of it. Being a public company could make it more difficult or costly for PubCo to obtain certain types of insurance, including director and officer liability insurance, and PubCo may be forced to accept reduced policy limits and coverage with increased self-retention risk or incur substantially higher costs to obtain the same or similar coverage. Being a public company could also make it more difficult and expensive for PubCo to attract and retain qualified persons to serve on the PubCo Board, board committees or as executive officers. Furthermore, if PubCo is unable to satisfy its obligations as a public company, it could be subject to delisting of its ordinary shares, fines, sanctions and other regulatory action and potentially civil litigation.

The additional reporting and other obligations imposed by various rules and regulations applicable to public companies will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. These increased costs will require PubCo to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by shareholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

The historical financial results of the Company and unaudited pro forma financial information included elsewhere in this proxy statement/prospectus may not be indicative of what the Company’s actual financial position or results of operations would have been if it were a public company.

The historical financial results of the Company included in this proxy statement/prospectus do not reflect the financial condition, results of operations or cash flows it would have achieved as a public company during the periods presented or those that PubCo will achieve in the future. PubCo’s financial condition and future results of operations could be materially different from amounts reflected in the Company’s historical financial statements included elsewhere in this proxy statement/prospectus, so it may be difficult for investors to compare PubCo’s future results to historical results or to evaluate its relative performance or trends in its business.

As a privately held company, the Company has not been required to comply with many corporate governance and financial reporting practices and policies required of a publicly traded company. As a result of the Business Combination, PubCo will be a public company with significant operations, and as such (and particularly after it is no longer an “emerging growth company” or “foreign private issuer”), will face increased legal, accounting, administrative and other costs and expenses as a public company that the Company did not incur as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations implemented by the SEC, the Public Company Accounting Oversight Board and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increase costs and make certain activities more time-consuming. A number of those requirements require it to carry out activities the Company has not done previously. In addition, expenses associated with SEC reporting requirements will be incurred. If any issues in complying with those requirements are identified (for example, if the auditors identify a significant deficiency or additional material weaknesses in the internal control over financial reporting), PubCo could incur additional costs to rectify those issues, and the existence of those issues could adversely affect its reputation or investor perceptions. In addition, PubCo will purchase director and officer liability insurance, which has substantial additional premiums. Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs. The additional reporting and other obligations associated with being a public company will increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities.

Similarly, the unaudited pro forma financial information in this proxy statement/prospectus is presented for illustrative purposes only and has been prepared based on a number of assumptions including, but not limited to, the Company being treated as the “acquiror” for financial reporting purposes in the Business Combination, the total debt obligations and the cash and cash equivalents of the Company on the date the Business Combination closes and the number of CF V Public Shares that are redeemed in connection with the Business Combination.

 

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Accordingly, such pro forma financial information may not be indicative of PubCo’s future operating or financial performance and PubCo’s actual financial condition and results of operations may vary materially from the pro forma results of operations and balance sheet contained elsewhere in this proxy statement/prospectus, including as a result of such assumptions not being accurate. See “Unaudited Pro Forma Condensed Combined Financial Information.”

Financial projections with respect to the Company may not prove to be reflective of actual financial results.

In connection with the Business Combination, the CF V Board considered, among other things, internal financial forecasts prepared by, or at the direction of, the management of the Company, the key elements of which are set forth in the section titled “The Business Combination Proposal—CF V Board’s Reasons for the Approval of the Business Combination.” The Company does not, as a matter of general practice, publicly disclose long-term forecasts or internal projections of its future performance, revenue, financial condition or other results. None of these projections or forecasts were prepared with a view towards public disclosure or compliance with the published guidelines of the SEC, U.S. GAAP, IFRS or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. These projections and forecasts are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them. These projections and forecasts are also subject to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of the Company. There can be no assurance that PubCo’s financial condition, including its cash flows or results of operations, will be consistent with those set forth in such projections and forecasts, which could have an adverse impact on the market price of the PubCo Class A Ordinary Shares or the business, financial condition and results of operations of PubCo following the Closing.

The Merger Agreement contains a minimum cash requirement for CF V. This requirement may make it more difficult for CF V to complete the Business Combination as contemplated.

The Merger Agreement provides that the Company’s obligation to consummate the Business Combination is conditioned on, among other things, a minimum cash requirement, which requires that, at or as of immediately prior to the Closing, the aggregate amount of Available Cash of CF V, after deducting the aggregate amount of all payments required to be made by CF V in connection with redemptions by CF V’s public stockholders and certain indebtedness of CF V immediately prior to Closing, plus the amount of cash available to PubCo from the PIPE Investment, the Forward Purchase Amount and issuance of the Company Series X Preference Shares, is equal to at least $225 million.

In addition, pursuant to the CF V Charter, in no event will CF V redeem CF V Public Shares in an amount that would cause its net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001 both immediately prior to and after the consummation of a business combination. If such conditions are not met, and such conditions are not or cannot be waived by the parties to the Merger Agreement, then the Merger Agreement could terminate, and the proposed Business Combination may not be consummated.

If such conditions are waived and the Business Combination is consummated, the cash held by PubCo and its subsidiaries in the aggregate, after the Closing may not be sufficient to allow them to operate and pay their expenses and liabilities as they become due. Furthermore, PubCo’s affiliates are not obligated to make loans to it or invest in it in the future after the Business Combination. The additional exercise of redemption rights with respect to a large number of CF V’s public stockholders may make PubCo unable to take such actions as may be desirable in order to optimize its capital structure after the Closing and it may not be able to raise additional financing from unaffiliated parties necessary to fund its expenses and liabilities after the Closing.

CF V, PubCo and/or the Company may seek to arrange for additional third party financing which may be in the form of debt (including bank debt or convertible notes) or equity (including the sale of shares pursuant to

 

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additional PIPE subscriptions), the proceeds of which would be used to repay amounts outstanding under existing Company indebtedness at Closing or for other purposes (including, in the case of CF V, to satisfy the Available Cash amount required to consummate the Business Combination). Such additional third-party financing may not be available to CF V, PubCo and/or the Company. Even if such third-party financing is available, the ability of CF V, PubCo or the Company to obtain such financing is subject to restrictions set forth in the Merger Agreement, including the consent of the other party. Furthermore, raising such additional financing may result in the incurrence of indebtedness at higher than desirable levels, or such terms may not be as attractive as those under the Company’s existing indebtedness.

The Sponsor or CF V’s or the Company’s respective directors, officers, advisors or respective affiliates may elect to purchase shares of CF V Class A Common Stock from CF V’s public stockholders prior to the consummation of the Business Combination, which may influence the vote on the Business Combination and reduce the public “float” of the CF V Class A Common Stock.

At any time at or prior to the Business Combination, subject to applicable securities laws, the Sponsor or CF V’s or the Company’s respective directors, officers, advisors or respective affiliates may (1) purchase CF V Public Shares from institutional and other investors who vote, or indicate an intention to vote, against any of the Proposals, or elect to redeem, or indicate an intention to redeem, CF V Public Shares, (2) execute agreements to purchase such shares from such investors in the future, or (3) enter into transactions with such investors and others to provide them with incentives to acquire CF V Public Shares, vote their CF V Public Shares in favor of the Proposals or not redeem their CF V Public Shares. Such a purchase may include a contractual acknowledgement that such stockholder, although still the record holder of the shares of CF V Common Stock, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that the Sponsor or CF V’s or the Company’s respective directors, officers, advisors or respective affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholder would be required to revoke their prior elections to redeem their shares. The purpose of such share purchases and other transactions would be to (1) increase the likelihood of approving the Proposals and (2) limit the number of CF V Public Shares electing to redeem.

Entering into any such arrangements may have a depressive effect on the price of CF V Common Stock prior to consummation of the Business Combination, or the PubCo Ordinary Shares following consummation of the Business Combination (e.g., by giving an investor or holder the ability to effectively purchase shares at a price lower than market, such investor or holder may therefore become more likely to sell the shares he or she owns, either at or prior to the Business Combination). If such transactions are effected, the consequence could be to cause the Business Combination to be consummated in circumstances where such consummation could not otherwise occur. Purchases of shares by the persons described above would allow them to exert more influence over the approval of the Proposals and would likely increase the chances that the Proposals would be approved. In addition, if such purchases are made, the public “float” of the CF V Public Shares and the number of beneficial holders of CF V’s securities prior to the Business Combination (and consequently, the number of beneficial holders of PubCo Ordinary Shares following consummation of the Business Combination), may be reduced, possibly making it difficult to obtain or maintain the quotation, listing or trading of PubCo’s securities on a national securities exchange.

CF V cannot be certain as to the number of CF V Public Shares that will be redeemed and the potential impact to CF V Stockholders who do not elect to redeem their CF V Public Shares.

There is no guarantee that a CF V Stockholder’s decision whether to redeem its shares of CF V Class A Common Stock for a pro rata portion of the Trust Account will put the CF V Stockholder in a better future economic position. CF V can give no assurance as to the price at which a CF V Stockholder may be able to sell its PubCo Class A Ordinary Shares in the future following the Closing or its shares of CF V Class A Common Stock following any alternative business combination. Certain events following the consummation of any initial business combination, including the Business Combination, and including redemptions of CF V Public Shares

 

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may cause an increase or decrease in the share price of CF V or PubCo, as applicable, and may result in a lower value realized now than a CF V Stockholder might realize in the future had the CF V Stockholder not redeemed its CF V Public Shares. Similarly, if a CF V Stockholder does not redeem its CF V Public Shares, the CF V Stockholder will bear the risk of ownership of the CF V Public Shares or PubCo Class A Ordinary Shares, as applicable, after the consummation of any initial business combination, and there can be no assurance that a CF V Stockholder can sell its shares in the future for a greater amount than the redemption price for CF V Public Shares. A CF V Stockholder should consult its own tax and/or financial advisor for assistance on how this may affect its individual situation.

On October 11, 2021, 2021, the closing price per share of CF V Class A Common Stock was $9.91. CF V Stockholders should be aware that while CF V is unable to predict the price per PubCo Class A Ordinary Share following the consummation of the Business Combination (and accordingly it is unable to calculate the potential impact of redemptions on the per share market price of CF V Public Shares owned by non-redeeming CF V Stockholders), increased levels of redemptions by CF V Stockholders may be a result of the price per share of CF V Class A Common Stock falling below the redemption price. We expect that more CF V Stockholders may elect to redeem their CF V Public Shares if the share price of the CF V Class A Common Stock is below the projected redemption price of $10.00 per share, and we expect that more CF V Stockholders may elect not to redeem their CF V Public Shares if the share price of the CF V Class A Common Stock is above the projected redemption price of $10.00 per share. Each CF V Public Share that is redeemed will represent both (i) a reduction, equal to the amount of the redemption price, of the cash that will be available to PubCo from the Trust Account and (ii) an increase in each CF V Stockholder’s pro rata ownership interest in PubCo following the consummation of the Business Combination. In addition, in the event that more than 12,500,000 CF V Public Shares are redeemed, the Minimum Cash Amount as set forth in the Merger Agreement may not be satisfied, and the Business Combination may not be consummated (although such condition may be waived by the Company).

If third parties bring claims against CF V, the proceeds held in the Trust Account could be reduced and the per share redemption amount received by holders of CF V Class A Common Stock may be less than $10.00 per share.

CF V’s placing of funds in the Trust Account may not protect those funds from third-party claims against CF V. Although CF V seeks to have all vendors, service providers (other than its independent registered public accounting firm), prospective target businesses or other entities with which CF V does business execute agreements with CF V waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account, there is no guarantee that they will execute such agreements or even if they execute such agreements that they would be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against CF V’s assets, including the funds held in the Trust Account. If any third-party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, CF V’s management will perform an analysis of the alternatives available to it and will enter into an agreement with a third-party that has not executed a waiver only if management believes that such third-party’s engagement would be significantly more beneficial to CF V than any alternative.

Examples of possible instances where CF V may engage a third-party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where CF V is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with CF V and will not seek recourse against the Trust Account for any reason. Upon redemption of the CF V Public Shares, if CF V is unable to complete an initial business combination within the prescribed time frame, or upon the exercise of a redemption right in connection with its initial business combination, CF V will be required to provide for payment of claims of creditors that were not

 

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waived that may be brought against CF V within the 10 years following redemption. Accordingly, the per share redemption amount received by CF V’s public stockholders could be less than the $10.00 per share currently held in the Trust Account, due to claims of such creditors.

The Sponsor has agreed that it will be liable to CF V if and to the extent any claims by a third-party (other than CF V’s independent registered public accounting firm) for services rendered or products sold to CF V, or a prospective target business with which CF V has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per CF V Public Share or (2) such lesser amount per CF V Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third-party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under CF V’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third-party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. CF V has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and CF V has not asked the Sponsor to reserve for such indemnification obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for CF V’s initial business combination and redemptions could be reduced to less than $10.00 per CF V Public Share. In such event, CF V may not be able to complete its initial business combination, and CF V’s public stockholders would receive such lesser amount per share in connection with any redemption of its CF V Public Shares. No member of CF V’s management team will indemnify CF V for claims by third parties including, without limitation, claims by vendors and prospective target businesses.

If, after CF V distributes the proceeds in the Trust Account to its public stockholders, it files a bankruptcy petition or an involuntary bankruptcy petition is filed against CF V that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of the CF V Board may be viewed as having breached their fiduciary duties to CF V’s creditors, thereby exposing the members of the CF V Board and CF V to claims of punitive damages.

If, after CF V distributes the proceeds in the Trust Account to its public stockholders, CF V files a bankruptcy petition or an involuntary bankruptcy petition is filed against CF V that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by CF V Stockholders. In addition, the CF V Board may be viewed as having breached its fiduciary duty to CF V’s creditors and/or having acted in bad faith by paying CF V’s public stockholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and CF V to claims of punitive damages.

If, before distributing the proceeds in the Trust Account to CF V’s public stockholders, CF V files a bankruptcy petition or an involuntary bankruptcy petition is filed against CF V that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of CF V Stockholders and the per-share amount that would otherwise be received by CF V Stockholders in connection with CF V’s liquidation may be reduced.

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