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
the pricing of $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”).
Key Elements of the Transaction:
- $400.0 million 4.25% convertible senior notes offering with an
initial conversion price of approximately $26.99 per share of AST
SpaceMobile’s Class A common stock, which represents a premium of
approximately 20.0% to the last reported sale price of AST
SpaceMobile’s Class A common stock on January 22, 2025;
- Capped call transactions entered into in connection with the
pricing of the notes with an initial cap price of $44.98 per share
of AST SpaceMobile’s Class A common stock, which represents a
premium of 100% to the last reported sale price of AST
SpaceMobile’s Class A common stock on January 22, 2025
Option to Purchase Additional Notes:
AST SpaceMobile also granted 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 sale of the notes to the initial purchasers is
expected to settle on January 27, 2025, subject to customary
closing conditions.
Use of Proceeds:
AST SpaceMobile estimates that the net proceeds from the
offering will be approximately $387.9 million (or approximately
$446.3 million if the initial purchasers’ option to purchase
additional notes is exercised in full), after deducting the initial
purchasers’ discounts and commissions and estimated offering
expenses payable by AST SpaceMobile. AST SpaceMobile intends to use
approximately $38.7 million 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 remainder of the net proceeds to be used for
general corporate purposes as set forth in the preceding
sentence.
Additional Details of the Notes:
The notes will be senior, unsecured obligations of AST
SpaceMobile. The notes will accrue interest at an annual rate of
4.25%, payable semiannually in arrears on March 1 and September 1
of each year, beginning on September 1, 2025. The notes will mature
on March 1, 2032, unless earlier converted, redeemed or
repurchased.
Prior to the close of business on the business day immediately
preceding December 1, 2031, noteholders will have the right to
convert their notes only upon the satisfaction of specified
conditions and during certain periods. On or after December 1, 2031
and until the close of business on the second scheduled trading day
immediately preceding March 1, 2032, noteholders may convert their
notes at any time regardless of these conditions. The initial
conversion rate will be 37.0535 shares of AST SpaceMobile’s Class A
common stock per $1,000 principal amount of notes (equivalent to an
initial conversion price of approximately $26.99 per share of AST
SpaceMobile’s Class A common stock, which represents a premium of
approximately 20.0% over the last reported sale price of $22.49 per
share of AST SpaceMobile’s Class A common stock on the Nasdaq
Global Select Market on January 22, 2025), subject to adjustment in
certain circumstances. AST SpaceMobile will settle conversions by
paying or delivering, as the case may be, cash, shares of AST
SpaceMobile’s Class A common stock, or a combination thereof, at
AST SpaceMobile’s election.
The notes will not be redeemable at AST SpaceMobile’s option
prior to March 6, 2029. AST SpaceMobile may, at its option, redeem
all or any portion of the notes for cash on or after March 6, 2029,
but only if the last reported sale price per share of AST
SpaceMobile’s Class A common stock equals or exceeds 130% of the
conversion price for a specified period of time and certain
liquidity conditions have been satisfied. The redemption price will
be equal to the principal amount of the notes to be redeemed, plus
accrued and unpaid interest, if any, to, but excluding, the
redemption date.
Noteholders will have the right to require AST SpaceMobile to
repurchase for cash all or a portion of their notes upon the
occurrence of a fundamental change (as defined in the indenture
governing the notes) at a purchase price of 100% of their principal
amount plus accrued and unpaid interest, if any, to, but excluding,
the relevant repurchase date. In addition, following certain
corporate events that occur prior to March 1, 2032 or if AST
SpaceMobile delivers a notice of redemption, AST SpaceMobile will,
in certain circumstances, increase the conversion rate for a
noteholder who elects to convert its notes in connection with such
corporate events or convert its notes in connection with such
notice of redemption, as the case may be.
Capped Call Transactions:
In connection with the pricing of the notes, AST SpaceMobile
entered into capped call transactions with certain of the initial
purchasers of the notes or affiliates thereof (the “option
counterparties”). The capped call transactions 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. The cap price of the capped call transactions is
initially $44.98 per share, which represents a premium of 100% over
the last reported sale price of AST SpaceMobile’s Class A common
stock of $22.49 per share on the Nasdaq Global Select Market on
January 22, 2025, and is subject to certain adjustments under the
terms of the capped call transactions.
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 are only being offered and will only be 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, and designed for both commercial and government
applications. Our engineers and space scientists are on a mission
to eliminate the connectivity gaps faced by today’s five billion
mobile subscribers and finally bring broadband to the billions who
remain unconnected. For more information, follow AST SpaceMobile on
YouTube, X (Formerly Twitter), LinkedIn and Facebook. Watch this
video for an overview of the SpaceMobile mission.
Forward-Looking Statements
This communication contains “forward-looking statements” that
are not historical facts, including statements concerning the
completion of the offering, 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 consummate the
offering, prevailing 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20250122193647/en/
Investor Contact: Scott Wisniewski
investors@ast-science.com
Media Contacts: Allison Eva Murphy Ryan 917-547-7289
AstSpaceMobile@allisonpr.com
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