8-KMaterial AgreementsSecurities & ListingRegulation FD+1

AST SpaceMobile, Inc. 8-K Report, Material Agreement (Dec 16, 2020)

Filed December 16, 2020For Securities:ASTS

Summary

This 8-K filing announces a definitive agreement for a business combination between New Providence Acquisition Corp. (NPA), a SPAC, and AST & Science LLC (AST), a company focused on satellite-based mobile communications. The transaction will result in AST becoming a publicly traded company under the name AST SpaceMobile Inc. A key component of this deal is a PIPE investment of $230 million from various investors purchasing shares at $10.00 each. The filing outlines the structure of the combined entity, which will operate under an umbrella partnership-C corporation (Up-C) structure, with AST holding most assets and the public company holding equity interests in AST. Significant details are provided regarding the transaction terms, including the equity purchase agreement, subscription agreements, and the proposed governance of the combined entity. The agreement outlines conditions for closing, including shareholder approval and minimum cash requirements, and includes provisions for sponsor stock forfeiture if certain funding thresholds are not met. The filing also discloses the initial composition of the Board of Directors for the post-combination company and the tax receivable agreement that will be entered into.

Key Highlights

  • 1AST & Science LLC (AST) to combine with New Providence Acquisition Corp. (NPA), a SPAC, and become a publicly traded company named AST SpaceMobile Inc.
  • 2A Private Investment in Public Equity (PIPE) of $230 million is secured through the sale of 23 million shares at $10.00 per share.
  • 3The combined company will adopt an Up-C structure, where AST will hold the operational assets and the public company will hold equity interests in AST.
  • 4The transaction is subject to customary closing conditions, including approval from NPA stockholders, minimum cash proceeds of $250 million (Trust Account plus PIPE), and the combined company maintaining its Nasdaq listing.
  • 5Sponsor shares will be forfeited if the total funding (Trust Account plus PIPE, pre-transaction expenses) is less than $400 million, to ensure Sponsor stock ownership does not exceed 20% of total outstanding shares.
  • 6The initial Board of Directors will consist of 13 members, with significant designation rights for Abel Avellan (7 directors), Invesat, Vodafone, Sponsor, American Tower (1 director each), and Rakuten (2 directors).
  • 7A Tax Receivable Agreement (TRA) will be entered into, obligating the company to pay TRA holders 85% of certain tax savings generated from AST's tax attributes.

Frequently Asked Questions

This 8-K filing announces the execution of a definitive equity purchase agreement for a business combination between New Providence Acquisition Corp. (NPA), a special purpose acquisition company (SPAC), and AST & Science LLC (AST). It provides material terms of the agreement and related transactions, signaling the path for AST to become a publicly traded company.

AST & Science will become a public company through a business combination with New Providence Acquisition Corp. (NPA). Following the closing of this transaction, the combined entity will change its name to AST SpaceMobile Inc.

The PIPE (Private Investment in Public Equity) investment is a commitment from certain investors to purchase an aggregate of 23,000,000 shares of the combined company's Class A common stock at $10.00 per share, totaling $230 million. This investment is crucial for funding the business combination and ensuring the combined company meets its financial closing conditions.

The business combination is subject to several closing conditions, including: approval by NPA's stockholders, the combined cash proceeds from NPA's trust account and the PIPE investment (net of redemptions and transaction expenses) being at least $250 million, NPA having at least $5,000,001 in tangible net assets, the company remaining listed on Nasdaq, and other customary conditions such as representations and warranties being true and correct and covenants being materially complied with.