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Spectrum Usage Rights Transactions | 3 Months Ended
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Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Spectrum Usage Rights Transactions | 13. Spectrum Usage Rights Transactions On January 5, 2025, AST LLC entered into a binding agreement (the “Strategic Collaboration Term Sheet”) with Ligado LLC under which the Company will receive long-term access to up to 45 MHz of lower mid-band spectrum in the United States and Canada for direct-to-device satellite applications. The Strategic Collaboration Term Sheet was entered into as part of the restructuring of Ligado LLC, which together with certain of its direct and indirect subsidiaries (together with Ligado LLC, “Ligado”) filed voluntary petitions for relief under Chapter 11 of United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on January 5, 2025. On March 22, 2025, pursuant to the Strategic Collaboration Term Sheet, the Company, AST LLC, Spectrum USA I, LLC, a subsidiary of AST LLC (“SpectrumCo”) and Ligado entered into certain definitive agreements that, among other things, govern the Company’s obligation to make annual usage payments, revenue share payments and a $550.0 million contingent payment to Ligado in exchange for the right to use the up to 40 MHz of the L-band spectrum, its satellites and other ground station assets, the Company’s obligation to make annual usage payments for the right to use the up to 5 MHz of the 1670-1675 MHz Spectrum, and issuance of the Penny Warrants (further described below). The transactions contemplated in the Strategic Collaboration Term Sheet (collectively, the “Spectrum Usage Rights Transactions”) are subject to the approval of the bankruptcy court, and the Company and its subsidiaries’ obligations to make payments under the definitive agreements will not become effective until after the bankruptcy court approval. On March 22, 2025, the Company issued Penny Warrants to Ligado LLC that entitles the holder of such warrants to purchase from the Company up to a total of 4,714,226 shares of the Company’s Class A Common Stock at an exercise price per share equal to $0.01 per share, subject to a 12-month lock-up. These Penny Warrants are accounted for as a non-employee share-based payment under ASC 718, Compensation – Stock Compensation, with a grant date fair value of approximately $121.2 million. The Penny Warrants are equity classified instruments that are subject to specific vesting conditions which were not met as of March 31, 2025. In addition, the Company capitalized approximately $4.0 million of third-party transaction costs that were incurred and directly attributable to the Spectrum Usage Rights Transactions within other non-current assets in the unaudited condensed balance sheets. To support the consideration that may become payable under the definitive agreements, on March 5, 2025 (“Commitment Date”), SpectrumCo received a $550.0 million (“Loan Amount”) institutional financing commitment in the form of a single draw non-recourse senior-secured delayed-draw term loan facility (“Facility”), available for nineteen months from the Commitment Date with an option to extend for an additional six months (“Availability Period”). The Facility includes a commitment fee, payable in cash or shares of the Company’s Class A Common Stock at the Company’s option, that is 2% of the Loan Amount due on the Commitment Date and upon entry into definitive documentation for the Facility (“Closing Date”). If the Company terminates the Facility prior to the end of the Availability Period, the Company will pay a termination fee, payable in cash or shares of the Company’s Class A Common Stock at the Company’s option, ranging from 1% to 5% of the Loan Amount depending on when the Company terminates the Facility. The Facility also includes an upfront fee that is 3% of the Loan Amount when the Company draws on the Facility as a reduction to proceeds received and some other fees that become payable starting from the Closing Date. As of March 31, 2025, the Company paid $2.8 million of the commitment fee in cash and capitalized the amount as deferred financing costs within other non-current assets in the unaudited condensed balance sheets.

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