Summary
AST SpaceMobile, Inc. (ASTS) announced on May 6, 2022, a significant at-the-market (ATM) equity offering facility with B. Riley Principal Capital, LLC. This agreement allows ASTS to sell up to $75 million of its Class A common stock over a 24-month period, at its sole discretion. The pricing of these sales will be based on the volume-weighted average price (VWAP) on the trading day of the sale, less a 3% discount, with provisions for both regular and intraday VWAP purchases. This facility provides ASTS with a flexible source of capital to fund its general corporate purposes and operations.
Key Highlights
- 1AST SpaceMobile entered into a Common Stock Purchase Agreement with B. Riley Principal Capital, LLC, allowing for the sale of up to $75 million in Class A common stock.
- 2The company has the sole discretion to determine the timing and amount of stock sales under this agreement.
- 3Sales will be priced at a discount to the volume-weighted average price (VWAP) on the trading day of the sale.
- 4The agreement has a 24-month term from the "Commencement" date, which is contingent on the effectiveness of a registration statement.
- 5ASTS issued initial commitment shares of Class A common stock to B. Riley upon execution of the agreement, with additional shares issuable upon achievement of certain sales thresholds.
- 6The company is restricted from entering into certain "Variable Rate Transactions" that could dilute existing shareholders.
- 7B. Riley is prohibited from engaging in short sales or hedging activities that establish a net short position in ASTS's stock during the agreement term.
Frequently Asked Questions
The primary purpose of the agreement is to provide AST SpaceMobile with a flexible source of capital. It allows the company to sell up to $75 million of its Class A common stock to B. Riley on an at-the-market basis, at the company's discretion, to fund general corporate purposes and operations.
Shares sold under the agreement will be priced based on the volume-weighted average price (VWAP) of AST SpaceMobile's Class A common stock on the trading day of the sale, with a fixed 3% discount to the VWAP applied. There are provisions for both regular daily VWAP purchases and intraday VWAP purchases.
Yes, there are limitations. ASTS cannot issue more than 36,310,037 shares to B. Riley without stockholder approval, which represents 19.99% of certain outstanding share classes. Additionally, B. Riley's aggregate beneficial ownership of the company's Class A common stock cannot exceed 4.99%.
AST SpaceMobile issued 21,969 shares of Class A common stock to B. Riley upon signing the agreement as initial commitment shares. Additional commitment shares will be issued upon the first VWAP purchase and upon reaching $25 million and $50 million in total gross cash proceeds from sales under the agreement.