ASTSW AST SpaceMobile Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 22, 2025

 

AST SpaceMobile, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		001-39040		84-2027232
(State or Other Jurisdiction		(Commission		(IRS Employer
of Incorporation)		File Number)		Identification No.)

 

Midland International Air & Space Port 2901 Enterprise Lane Midland, Texas		79706
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (432) 276-3966

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.0001 per share		ASTS		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On January 22, 2025, AST SpaceMobile, Inc. (the “Company”) announced a proposed private offering (the “Offering”) of convertible senior notes due 2032 (the “Notes”) and its intention to enter into capped call transactions in connection therewith as described in Item 8.01 below. In connection with the Offering, the Company provided the disclosure attached as Exhibit 99.1 for the purpose of supplementing and updating disclosures contained in the Company’s prior filings with the Securities and Exchange Commission (the “SEC”), which includes certain preliminary unaudited financial information of the Company for the three months and year ended December 31, 2024 and an update on the Company’s liquidity. Such disclosure is furnished under the headings “Preliminary Estimated Results for the Three Months and Year Ended December 31, 2024” and “Liquidity Update” in Exhibit 99.1 to this report.

 

The information contained in this Item 2.02 and Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor will such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

On January 22, 2025, the Company issued a notice to the holders of the approximately $148.0 million aggregate principal amount of its 5.50% convertible PIK toggle notes due 2034 (the “2034 Convertible Notes”) that it is exercising its option to require all of such notes to convert into shares of Class A common stock of the Company, par value $0.0001 per share (“Class A Common Stock”) at a conversion price of $5.75 per share. The principal amount of the 2034 Convertible Notes to be converted, plus accrued interest through the date hereof, is approximately $148.5 million, and as a result, the Company expects to issue approximately 25.8 million shares of its Class A Common Stock in satisfaction of its conversion obligation. The 2034 Convertible Notes will be automatically cancelled upon the issuance of the shares resulting from the conversion of the 2034 Convertible Notes, which will occur as promptly as practicable thereafter, subject to receipt of any required governmental approvals. The issuance of the shares of Class A Common Stock resulting from the conversion of the 2034 Convertible Notes will be exempt from registration under Section 3(a)(9) of the Securities Act.

 

Item 7.01 Regulation FD Disclosure.

 

In connection with the Offering, the Company provided the disclosure attached as Exhibit 99.1 for the purpose of supplementing and updating disclosures contained in the Company’s prior filings with the SEC, which includes an update on the Company’s 2024 “at the market offering” program and the conversion of the 2034 Convertible Notes. Such disclosure is furnished under the headings “ATM Update” and “2034 Convertible Note Conversion” in Exhibit 99.1 to this report.

 

The information contained in this Item 7.01 and Exhibit 99.1 shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section, nor will such information be deemed incorporated by reference in any filing under the Securities Act, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

 

Item 8.01 Other Events.

 

On January 22, 2025, the Company issued a press release announcing that it proposes to offer, subject to market conditions and other factors, $400.0 million aggregate principal amount of Notes in the Offering and its intention to enter into capped call transactions in connection therewith. The Company also announced that it intends to grant the initial purchasers of the Notes in the Offering an option to purchase, within a 13-day period beginning on, and including, the date on which the Notes are first issued, up to an additional $60.0 million aggregate principal amount of Notes.

 

 

The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act. Neither the Notes nor the shares of the Company’s Class A common stock potentially issuable upon conversion of the Notes, if any, have been, or will be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, such registration requirements.

 

The press release announcing the proposed Offering was issued in accordance with Rule 135c under the Securities Act. A copy of the press release is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Neither this Current Report on Form 8-K nor the press release filed as Exhibit 99.2 hereto constitutes an offer to sell or a solicitation of an offer to buy the Notes, any shares of the Company’s Class A common stock potentially issuable upon conversion of the Notes, or any other securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful. Any offer of the Notes will be made only by means of a private offering memorandum.

 

Forward-Looking Statements

 

This Current Report on Form 8-K contains forward-looking statements including statements concerning the proposed Offering of the Notes and the capped call transactions. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “seek,” “plan,” “project,” “propose,” “target,” “looking ahead,” “look to,” “move into,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements represent the Company’s current beliefs, estimates and assumptions only as of the date of this Current Report on Form 8-K and information contained in this Current Report on Form 8-K should not be relied upon as of any subsequent date. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to, market risks, trends and conditions. These risks are not exhaustive. Further information on these and other risks that could affect the Company’s results is included in its filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024, and the future reports that it may file from time to time with the SEC. The Company assumes no obligation to, and does not currently intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Disclosure made by AST SpaceMobile, Inc. on January 22, 2025
99.2		Press release titled “AST SpaceMobile Announces Proposed Private Offering of $400.0 Million of Convertible Senior Notes Due 2032”, dated January 22, 2025
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		AST SPACEMOBILE, INC.
Date:	January 22, 2025	By:	/s/ Andrew M. Johnson
			Andrew M. Johnson
			Chief Financial Officer and Chief Legal Officer

 

 

 

Exhibit 99.1

 

Recent Developments

 

Preliminary Estimated Results for the Three Months and Year Ended December 31, 2024

 

Our financial results as of and for the fiscal year ended December 31, 2024 are not yet complete and will not be available until after the completion of this offering. Accordingly, set forth below are our preliminary estimated ranges for cash and cash equivalents and restricted cash, and capitalized property and equipment costs, as of December 31, 2024, and Total operating expenses and Adjusted operating expenses for the three and twelve months ended December 31, 2024. The preliminary results as of and for the three and twelve months ended December 31, 2024 presented below should not be viewed as a substitute for consolidated financial statements prepared in accordance with GAAP. Our estimated financial results for the three and twelve months ended and as of December 31, 2024 are subject to revision based upon the completion of our year-end financial closing procedures and other developments that may arise prior to the time our financial results for the three and twelve months ended December 31, 2024 are finalized, and are therefore forward-looking statements based solely on information available to us as of the date of the offering memorandum, and the reported financial results may differ from these estimates. Neither the Company’s independent auditors, nor any other independent accountants, have audited, reviewed, compiled, examined, or performed any procedures with respect to the preliminary financial information, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the preliminary financial information. Our actual results may differ from these estimates due to the completion of our final closing procedures, final adjustments and other developments that may arise between now and the time our financial results as of and for the fiscal year ended December 31, 2024 are finalized. You should not place undue reliance on these preliminary estimates. For additional information, see “Forward-Looking Statements” and “Risk Factors” in the offering memorandum.

 

Adjusted operating expense is an alternative financial measure used by management to evaluate our operating performance as a supplement to our most directly comparable U.S. GAAP financial measure. We define Adjusted operating expenses as Total operating expenses adjusted to exclude amounts of stock-based compensation expense and depreciation and amortization expense. We believe Adjusted operating expense is a useful measure across time in evaluating the Company’s operating performance as we use Adjusted operating expenses to manage the business, including in preparing our annual operating budget and financial projections. Adjusted operating expenses is a non-GAAP financial measure that has no standardized meaning prescribed by U.S. GAAP, and therefore has limits in its usefulness to investors. Because of the non-standardized definition, it may not be comparable to the calculation of similar measures of other companies and is presented solely to provide investors with useful information to more fully understand how management assesses performance. This measure is not, and should not be viewed as, a substitute for its most directly comparable GAAP measure of Total operating expenses.

 

The following includes our unaudited preliminary estimated results for the three and twelve months ended and as of December 31, 2024:

 

	●	Cash and cash equivalents and restricted cash was approximately $567.5 million as of December 31, 2024 compared to $88.1 million as of December 31, 2023.
	●	As of December 31, 2024, we have incurred approximately $97.3 million to $104.3 million net change in capitalized property and equipment costs as compared to $92.5 million net change in capitalized property and equipment costs incurred as of December 31, 2023.
	●	We expect our preliminary Total operating expenses to be between $58.3 million and $62.3 million for the three months ended December 31, 2024 as compared to $60.9 million of Total operating expenses for the three months ended December 31, 2023.

 

 

	●	We expect our preliminary Total operating expenses to be between $244.8 million and $248.8 million for the twelve months ended December 31, 2024 as compared to $222.4 million of Total operating expenses for the twelve months ended December 31, 2023.
	●	We expect our total preliminary Adjusted operating expenses to be between $38.9 million and $41.9 million for the three months ended December 31, 2024 as compared to $38.6 million of Adjusted operating expenses for the three months ended December 31, 2023.
	●	We expect our total preliminary Adjusted operating expenses to be between $150.0 million and $153.0 million for the twelve months ended December 31, 2024 as compared to $154.6 million of Adjusted operating expenses for the twelve months ended December 31, 2023.

 

Set forth below is a reconciliation of preliminary Adjusted operating expenses to preliminary Total operating expenses for the three and twelve months ended December 31, 2024:

 

		Three months ended December 31, 2024								Twelve months ended December 31, 2024
(Dollars in thousands)		Low				High				Low				High
Preliminary Total operating expenses		$	58,256			$	62,256			$	244,794			$	248,793
Less: Preliminary stock-based compensation, depreciation and amortization			(19,335	)			(20,335	)			(94,832	)			(95,832	)
Preliminary Adjusted operating expenses		$	38,921			$	41,921			$	149,962			$	152,962

 

Set forth below is a reconciliation of Adjusted operating expenses to Total operating expenses for the three and twelve months ended December 31, 2023:

 

(Dollars in thousands)		Three months ended December 31, 2023				Twelve months ended December 31, 2023
Total operating expenses		$	60,878			$	222,367
Less: Stock-based compensation, depreciation and amortization			(22,286	)			(67,758	)
Adjusted operating expenses		$	38,592			$	154,609

 

Liquidity Update

 

As of December 31, 2024, total cash and cash equivalents and restricted cash was approximately $567.5 million, and our total consolidated indebtedness for borrowed money was approximately $167.5 million, of which approximately $148.0 million was subordinated indebtedness and an aggregate of $19.5 million was senior secured indebtedness. As of January 22, 2025, we have notified the holders of the approximately $148.0 million aggregate principal amount of our 5.50% convertible PIK toggle notes due 2034 that we are exercising our option to require all of such notes to convert into shares of Class A common stock at a conversion price of $5.75 per share.

 

 

ATM Update

 

The Company currently has approximately $66.0 million of availability remaining under its equity distribution agreement dated September 5, 2024 entered into with the agents named therein (the “2024 ATM equity program”). As of September 30, 2024, the Company had issued 3,911,053 shares of its Class A common stock under the 2024 ATM equity program and received proceeds of $106.9 million, net of commissions paid to the agents and transaction costs. Subsequent to September 30, 2024, the Company has issued an additional 9,264,314 shares of its Class A common stock under the 2024 ATM equity program and received net proceeds of approximately $218.0 million. The Company intends to agree with the initial purchasers of the Notes not to issue any shares of Class A common stock pursuant to the 2024 ATM equity program for 30 days following the date of pricing of the Offering. The Company may seek to enter into a new equity ATM program in the future.

 

2034 Convertible Note Conversion

 

As of January 22, 2025, we have notified the holders of the $148.0 million aggregate principal amount of our 5.50% convertible PIK toggle notes due 2034 (the “2034 convertible notes”) that we are exercising our option to require all of such notes to convert into shares of Class A common stock at a conversion price of $5.75 per share. The principal amount of the 2034 convertible notes to be converted, plus accrued interest through the date hereof, is approximately $148.5 million, which will be converted into approximately 25.8 million shares of our Class A common stock. The 2034 convertible notes will be automatically cancelled upon the issuance of the shares resulting from the conversion of the 2034 convertible notes, which will occur as promptly as practicable thereafter, subject to receipt of any required governmental approvals.

 

 

 

Exhibit 99.2

 

AST SpaceMobile Announces Proposed Private Offering of $400.0 Million of Convertible Senior Notes Due 2032

 

January 22, 2025

 

MIDLAND, Texas--(BUSINESS WIRE) – AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), the company building the first and only space-based cellular broadband network accessible directly by everyday smartphones, and designed for both commercial and government applications, today announced its intent to offer, subject to market conditions and other factors, $400.0 million aggregate principal amount of convertible senior notes due 2032 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). AST SpaceMobile also intends to grant the initial purchasers of the notes in the offering an option to purchase, within a 13-day period beginning on, and including, the date on which the notes are first issued, up to an additional $60.0 million aggregate principal amount of notes.

 

The notes will be senior, unsecured obligations of AST SpaceMobile, will accrue interest payable semiannually in arrears and will mature on March 1, 2032, unless earlier converted, redeemed or repurchased. The notes will be convertible into cash, shares of AST SpaceMobile’s Class A common stock, or a combination thereof, at AST SpaceMobile’s election. The interest rate, initial conversion rate, and other terms of the notes are to be determined upon pricing of the offering.

 

AST SpaceMobile intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. AST SpaceMobile intends to use the remaining net proceeds from the offering for working capital or other general corporate purposes, which may include other strategic transactions. If the initial purchasers exercise their option to purchase additional notes, AST SpaceMobile expects to use a portion of the net proceeds from the sale of the additional notes to enter into additional capped call transactions with the option counterparties (as defined below), with the remainder of the net proceeds to be used for general corporate purposes as set forth in the preceding sentence.

 

In connection with the pricing of the notes, AST SpaceMobile expects to enter into capped call transactions with one or more of the initial purchasers of the notes or affiliates thereof and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to customary adjustments, the number of shares of AST SpaceMobile’s Class A common stock initially underlying the notes. The capped call transactions are expected generally to reduce the potential dilution to AST SpaceMobile’s Class A common stock upon any conversion of notes and/or offset any cash payments AST SpaceMobile is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap.

 

In connection with establishing their initial hedges of the capped call transactions, AST SpaceMobile expects the option counterparties or their respective affiliates will enter into various derivative transactions with respect to AST SpaceMobile’s Class A common stock and/or purchase shares of AST SpaceMobile’s Class A common stock concurrently with or shortly after the pricing of the notes, including with, or from, as the case may be, certain investors in the notes. This activity could increase (or reduce the size of any decrease in) the market price of AST SpaceMobile’s Class A common stock or the notes at that time.

 

 

In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to AST SpaceMobile’s Class A common stock and/or purchasing or selling AST SpaceMobile’s Class A common stock or other securities of AST SpaceMobile in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during the 20 trading day period beginning on the 21st scheduled trading day prior to the maturity date of the notes, or, to the extent AST SpaceMobile exercises the relevant termination election under the capped call transactions, following any repurchase, redemption or conversion of the notes). This activity could also cause or avoid an increase or a decrease in the market price of AST SpaceMobile’s Class A common stock or the notes, which could affect a noteholder’s ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of notes, it could affect the number of shares, if any, and value of the consideration that a noteholder will receive upon conversion of its notes.

 

The notes will only be offered and sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act by means of a private offering memorandum. Neither the notes nor the shares of AST SpaceMobile’s Class A common stock potentially issuable upon conversion of the notes, if any, have been, or will be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, such registration requirements.

 

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of the notes or any shares of AST SpaceMobile’s Class A common stock potentially issuable upon conversion of the notes and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.

 

About AST SpaceMobile

 

AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with standard, unmodified mobile devices based on our extensive IP and patent portfolio. Our engineers and space scientists are on a mission to eliminate the connectivity gaps faced by today’s approximately five billion mobile subscribers and finally bring broadband to the billions who remain unconnected.

 

Forward-Looking Statements

 

This communication contains “forward-looking statements” that are not historical facts, including statements concerning the completion, timing, and size of the offering, the granting of a 13-day option to purchase additional notes, the potential effects of entering into the capped call transactions, and the expected use of the net proceeds from the offering. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “would,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Such risks include, but are not limited to, whether AST SpaceMobile will offer the notes or consummate the offering, the final terms of the offering, prevailing market conditions, the anticipated principal amount of the notes, which could differ based upon market conditions, the anticipated use of the net proceeds from the offering, which could change as a result of market conditions or for other reasons, the impact of general economic, industry or political conditions in the United States or internationally, and whether the capped call transactions will become effective.

 

AST SpaceMobile cautions that the foregoing list of factors is not exclusive. AST SpaceMobile cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors in AST SpaceMobile’s Form 10-K filed with the SEC on April 1, 2024. AST SpaceMobile’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, AST SpaceMobile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

 

Investor Contact:

Scott Wisniewski

investors@ast-science.com

 

Media Contacts:

Allison

Eva Murphy Ryan

917-547-7289

AstSpaceMobile@allisonpr.com

 

 

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Cover	Jan. 22, 2025
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jan. 22, 2025
Entity File Number	001-39040
Entity Registrant Name	AST SpaceMobile, Inc.
Entity Central Index Key	0001780312
Entity Tax Identification Number	84-2027232
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Midland International Air & Space Port
Entity Address, Address Line Two	2901 Enterprise Lane
Entity Address, City or Town	Midland
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	79706
City Area Code	(432)
Local Phone Number	276-3966
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Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	ASTS
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

---