Delaware |
4813 |
87-4759355 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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F-1 |
• | our ability to realize the benefits expected from the Business Combination; |
• | our ability to maintain the listing of our Class A Common Stock on the NYSE; |
• | the limited liquidity and trading of our securities; |
• | the costs related to being a public company; |
• | our ability to raise additional capital in the future and our ability to comply with restrictive covenants related to our existing long-term indebtedness or any new debt we incur; |
• | the fact that we have incurred significant operating losses in the past and may not be able to achieve or maintain profitability in the future; |
• | our limited operating history; |
• | our ability to expand existing product and service offerings into new markets or to launch new product or service offerings; |
• | our ability to effectively compete in the competitive broadband industry; |
• | our ability to maintain or obtain rights to use licensed spectrum in markets in which we provide or intend to provide service and any declines in the value of our Federal Communications Commission (“FCC”) licenses; |
• | our ability to maintain or obtain rights to provide our services in apartment buildings and to install our equipment on vertical assets; |
• | the unavailability, reduction, elimination or adverse application of government subsidies, including through the Rural Digital Opportunity Fund (“RDOF”), the legacy Emergency Broadband Benefit program (“EBB”) and its successor Affordable Connectivity Program (“ACP”); |
• | the success of our marketing efforts and ability to attract customers in a cost-effective manner; |
• | our ability to maintain and enhance our reputation and brand and differentiate our offerings from our competitors; |
• | the success of our strategic relationships with third parties; |
• | our dependence on a limited number of third-party suppliers, manufacturers and licensors to supply some of the hardware and software necessary to provide some of our services, and any disruption in our relationships with these parties; |
• | any failure by suppliers to deliver components according to schedules, prices, quality and volumes that are acceptable to us; |
• | our ability to comply with extensive governmental legislation and regulation and the cost of doing so; |
• | any disruption or failure of, or defects in, the network and information systems on which our business relies; |
• | the enforceability of our intellectual property, including our patents, and our potential infringement on the intellectual property rights of others, cybersecurity risks or potential breaches of data security; |
• | our ability to maintain an effective system of internal controls over financial reporting; |
• | our ability to retain or recruit, or adapt to changes required in, our founders, executive officers, key personnel or directors; |
• | the impact of the COVID-19 pandemic; and |
• | other factors detailed under the section of this prospectus entitled “Risk Factors.” |
• | It is not possible to predict the actual number of shares of Class A Common Stock, if any, we will sell under the Purchase Agreement to the Stockholder, or the actual gross proceeds resulting from those sales. |
• | The sale and issuance of our Class A Common Stock to the Stockholder will cause dilution to our existing stockholders, and the sale of the shares of Class A Common Stock acquired by the Stockholder, or the perception that such sales may occur, could cause the price of our Class A Common Stock to fall. |
• | Investors who buy shares of Class A Common Stock from the Stockholder at different times will likely pay different prices. |
• | We may use proceeds from sales of shares of Class A Common Stock made pursuant to the Purchase Agreement in ways with which you may not agree or in ways which may not yield a significant return. |
• | We have a history of losses, and may not achieve or maintain profitability in the future. |
• | We have experienced rapid growth since inception, which may not be indicative of our future growth, and, if we continue to grow rapidly, we may not be able to manage our growth effectively. |
• | Our limited operating history makes it difficult to evaluate our current business and future prospects. |
• | Our financial projections may not prove accurate. |
• | Investors should not rely on outdated financial projections. |
• | Our decision to expand existing product and service offerings into new markets or to launch new product or service offerings may consume significant financial and other resources and may not achieve the desired results. |
• | We operate in a highly competitive business environment, which could materially adversely affect our business, financial condition, results of operations and liquidity. |
• | If we do not maintain or obtain rights to use licensed spectrum in markets in which we provide or intend to provide service, we may be unable to operate in these markets, which could harm our business and our ability to execute our business strategy. |
• | Our business is dependent on successfully maintaining or obtaining rights to provide our services in apartment buildings and to install our equipment on vertical assets. |
• | The value of our spectrum licenses could decline, which could materially affect our ability to raise capital, and could have a material adverse effect on our business and results of operations. |
• | The unavailability, reduction, elimination or adverse application of government subsidies, including through the RDOF, the legacy EBB program and its succesor, the ACP, could have a material adverse effect on our business and results of operations. |
• | Our business model and growth strategy depends on our marketing efforts and ability to attract customers in a cost-effective manner. |
• | Our reputation, brand and ability to differentiate our offerings from our competitors is important to our success, and if we are not able to maintain and enhance our reputation and brand and differentiate our offerings from our competitors, our business, financial condition and results of operations may be adversely affected. |
• | Our growth depends in part on the success of our strategic relationships with third parties. |
• | A significant portion of our expenses are fixed, and we may not be able to adapt our cross structure to offset declines in revenue. |
• | Our business is subject to extensive governmental legislation and regulation, which could adversely affect our business, increase our operational and administrative expenses and limit our revenues. |
• | Increasing regulation of our internet-based products and services could adversely affect our ability to provide new products and services. |
• | We rely on network and information systems for our operations and a disruption or failure of, or defects in, those systems may disrupt our operations, damage our reputation with customers and adversely affect our results of operations. |
• | Cyber security risks, data loss or other breaches of our network security could materially harm our business and results of operations, and the processing, storage, use and disclosure of personal or sensitive information could give rise to liabilities and additional costs as a result of governmental regulation, litigation and conflicting legal requirements relating to personal privacy rights. |
• | Our management has limited experience operating as a public company. |
• | We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet our periodic reporting obligations. |
• | We may need additional capital to pursue our business objectives and respond to business opportunities, challenges or unforeseen circumstances, and we cannot be sure that additional financing will be available. |
• | For the year ended December 31, 2021, our independent registered public accounting firm included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements included elsewhere in this prospectus, and there can be no guarantee that we will continue as a going concern absent the ability to raise additional capital within the next 12 months. |
• | The Starry Credit Agreement (as defined below) contains restrictive and financial covenants that may limit our operating flexibility. |
• | Our co-founder and Chief Executive Officer controls a significant percentage of our voting power and is able to exert significant control over the direction of our business. |
• | Because we are a “controlled company” within the meaning of the NYSE rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies. |
• | Other risks and uncertainties described in this prospectus, including those under the section entitled “Risk Factors.” |
• | being permitted to present only two years of audited financial statements and selected financial data and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our periodic reports and registration statements, including this prospectus, subject to certain exceptions; |
• | not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”); |
• | reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements, and registration statements, including in this prospectus; |
• | not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (the “PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; and |
• | exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. |
• | December 31, 2027 (the last day of the fiscal year that follows the fifth anniversary of the effectiveness of our Registration Statement on Form S-4 in connection with the Business Combination); |
• | the last day of the fiscal year in which we have total annual gross revenue of at least $1.07 billion; |
• | the date on which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and |
• | the date on which we have issued more than $1 billion in non-convertible debt securities during the prior three-year period. |
Issuer |
Starry Group Holdings, Inc. |
Class A Common Stock offered by the Stockholder |
Up to 33,000,000 shares of Class A Common Stock, consisting of: |
• | the Commitment Shares, which are the 396,826 shares of Class A Common Stock that we issued to Cantor in consideration of its irrevocable commitment to purchase shares of Class A Common Stock at our election under the Purchase Agreement; and |
• | up to 32,603,174 shares of Class A Common Stock that we may elect, in our sole discretion, to issue and sell to Cantor, from time to time from and after the Commencement Date under the Purchase Agreement. |
Conflict of Interest |
Cantor is an affiliate of Cantor Fitzgerald & Co. (“CF&CO”) a FINRA member. CF&CO is expected to act as an executing broker for the sale of the shares of Class A Common Stock sold by Cantor pursuant to the Committed Equity Financing. |
The receipt by Cantor of all the proceeds from sales of shares of Class A Common Stock to the public made through CF&CO results in a “conflict of interest” under Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 5121. Accordingly such sales will be conducted in compliance with FINRA Rule 5121. See “Plan of Distribution (Conflict of Interest).” |
Risk Factors |
See “Risk Factors” beginning on page 9 and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the securities being offered by this prospectus. |
Trading Symbol |
Our Class A Common Stock is listed and traded on the NYSE under the symbol “STRY.” |
• | increase the number of customers using our service; |
• | increase our market share within existing markets and expand into new markets; |
• | expand our service offerings, including offering service to small and medium sized businesses; |
• | increase our brand awareness; |
• | retain our spectrum licenses; |
• | retain adequate availability of financing sources if necessary; and |
• | obtain any additional necessary capital to meet our business objectives. |
• | our inability to satisfy build-out or service deployment requirements on which some of our spectrum licenses or leases are, or may be, conditioned, which may result in the loss of our rights to the spectrum subject to the requirements; |
• | changes to regulations governing our spectrum rights that could adversely affect our ability to utilize the spectrum as required in our business; |
• | our inability to use a portion of the spectrum we have acquired or leased or to acquire additional spectrum due to interference from licensed or unlicensed operators in the spectrum bands in which we have rights or in adjacent bands; |
• | the refusal by the FCC to recognize our acquisition or lease of spectrum licenses from others or our investments in other license holders, to the extent we enter into future agreements to acquire or lease spectrum; |
• | our inability to offer new services or to expand existing services to take advantage of new capabilities of our network resulting from advancements in technology due to regulations governing our spectrum rights; |
• | our inability to obtain or lease more spectrum in the future due to the possible imposition of limits or caps on our spectrum holdings, which could prevent us from expanding our service in existing or new markets; |
• | our inability to control or retain leased spectrum due to contractual disputes with, or the bankruptcy or other reorganization of, the license holders, or third parties; |
• | the failure of the FCC to renew our spectrum licenses or those held by the parties from whom we lease spectrum as they expire; |
• | our failure to obtain extensions or renewals of spectrum leases, or our inability to renegotiate those leases, on terms acceptable to us before they expire, which may result in the loss of spectrum we need to operate our network in the market covered by the spectrum leases; |
• | increases in spectrum prices, because of increased competition for the limited supply of licensed spectrum in the United States, which could limit our ability to acquire new spectrum rights, and could in turn prevent us from expanding our service in existing or new markets; and |
• | the invalidation of our authorization to use all or a significant portion of our spectrum, resulting in, among other things, impairment charges related to assets recorded for such spectrum. |
• | increases in supply of spectrum that provides similar functionality; |
• | new technology in unlicensed bands that provides the same capability as our network; |
• | a decrease in the demand for services offered with any of our spectrum licenses; |
• | lower values placed on similar spectrum licenses in future FCC spectrum auctions; |
• | regulatory limitations on the use, leases, transfer or sale of rights in any of our spectrum licenses; |
• | changes to the licensing, service or technical rules to the spectrum bands covered by our spectrum licenses; or |
• | bankruptcy or liquidation of any comparable companies. |
• | refinance existing obligations to extend maturities; |
• | raise additional capital, through bank loans, debt or equity issuances or a combination thereof; |
• | cancel or scale back current and future spending programs; or |
• | sell assets or interests in one or more of our businesses. |
• | actual or anticipated fluctuations in our operating results due to factors related to our business; |
• | failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; |
• | the failure of securities analysts to cover, or maintain coverage of, our Class A Common Stock; |
• | issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; |
• | operating and share price performance of other companies in the industry or related markets; |
• | the timing and magnitude of investments in the growth of the business; |
• | success or failure of our business strategies; |
• | our ability to obtain financing as needed; |
• | announcements by us or our competitors of significant acquisitions, dispositions or strategic investments; |
• | additions or departures of our key management or other personnel; |
• | sales of substantial amounts of our Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; |
• | changes in capital structure, including future issuances of securities or the incurrence of debt; |
• | changes in accounting standards, policies, guidance, interpretations or principles; |
• | investor perception of us and our industry; |
• | overall market fluctuations; |
• | results from any material litigation or government investigation; |
• | changes in laws and regulations (including tax laws and regulations) affecting our business; |
• | changes in capital gains taxes and taxes on dividends affecting stockholders; and |
• | general economic conditions and other external factors. |
• | authorize our Class X Common Stock that entitle Chaitanya Kanojia, our Chief Executive Officer and founder, to 20 votes per share of such stock until the Sunset Date (as defined in our Charter); |
• | provide or a classified board of directors with staggered, three-year terms; |
• | permit our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquire; |
• | prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; |
• | limit the liability of, and provide for the indemnification of, our directors and officers; |
• | permit our board of directors to amend our Bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend our Bylaws to facilitate an unsolicited takeover attempt; |
• | require a supermajority vote of stockholders to amend certain provisions of our Charter and a supermajority vote of stockholders in order to amend our Bylaws; |
• | limit our ability to engage in business combinations with certain interested stockholders without certain approvals; and |
• | mandate advance notice procedures with which stockholders must comply in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company. |
• | a number of shares of Class A Common Stock which, when aggregated with all other shares of Class A Common Stock then beneficially owned by Cantor and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in Cantor beneficially owning Class A Common Stock equal to (but not exceeding) the Beneficial Ownership Limitation; |
• | a number of shares equal to (a) the VWAP Purchase Share Percentage (as defined below) multiplied by (b) the total number (or volume) of shares of Class A Common Stock traded on the principal market (or, if the Class A Common Stock is then listed on an alternate market, on such alternate market), each as defined in the Purchase Agreement, during the applicable VWAP Purchase Period on the applicable VWAP Purchase Date for such VWAP Purchase; and |
• | the number of shares of Class A Common Stock constituting a good faith estimate by the Company of the number of shares that Cantor shall have the obligation to buy pursuant to the VWAP Purchase Notice. |
• | the accuracy in all material respects of the representations and warranties of the Company and Cantor included in the Purchase Agreement; |
• | us having performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Purchase Agreement and the Cantor Registration Rights Agreement to be performed, satisfied or complied with by us; |
• | the registration statement that includes this prospectus having been declared effective under the Securities Act by the SEC and not being subject to any stop order, and Cantor being able to utilize this prospectus to resell all of the Commitment Shares and the Class A Common Stock included in this prospectus; |
• | the absence of any material misstatement or omission in the registration statement that includes this prospectus; |
• | this prospectus, the current report, and all reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act having been filed with the SEC; |
• | trading in the Class A Common Stock not having been suspended by the SEC, the principal market or FINRA and there not having been imposed any suspension of, or restriction on, accepting additional deposits of Class A Common Stock by the depository; |
• | no condition, occurrence, state of facts or event constituting a Material Adverse Effect (as such term is defined in the Purchase Agreement) shall have occurred and be continuing; |
• | customary bankruptcy-related conditions; and |
• | the receipt by Cantor of customary legal opinions, auditor comfort letters and bring-down legal opinions as required under the Purchase Agreement. |
• | the first (1st) day of the month next following the 24-month anniversary of the effective date of the registration statement of which this prospectus forms a part; |
• | the date on which Cantor has purchased the Total Commitment pursuant to the Purchase Agreement; |
• | the date on which our Class A Common Stock fails to be listed or quoted on the NYSE or any alternative market; and |
• | the date on which, pursuant to or within the meaning of any bankruptcy law, we commence a voluntary case or any Person commences a proceeding against us, a custodian is appointed for us or for all or substantially all of our property, or we make a general assignment for the benefit of our creditors. |
Assumed Trading Price of Class A Common Stock |
Number of Shares Sold Under the Facility (1) |
Commitment Shares (2) |
Total Shares of Class A Common Stock Issued to Stockholder |
Percentage of Outstanding Shares of Common Stock After Giving Effect to Issuances to Stockholder (3) |
Purchase Price for Shares of Class A Common Stock Sold Under the Facility (4) | |||||
$2.52 (5) |
32,947,209 |
396,826 | 33,344,035 |
16.66% | $80,536,157.68 | |||||
$3.97 (6) |
25,188,916 | 396,826 | 25,585,742 | 13.30% | $96,999,996.62 | |||||
$5.00 |
20,000,000 | 396,826 | 20,396,826 | 10.90% | $97,000,000.00 | |||||
$6.00 |
16,666,666 | 396,826 | 17,063,492 | 9.28% | $96,999,996.12 | |||||
$7.00 |
14,285,714 | 396,826 | 14,682,540 | 8.09% | $96,999,998.06 |
(1) | The number of shares of Class A Common Stock offered by this prospectus may not cover all the shares of Class A Common Stock we ultimately may sell to Cantor under the Purchase Agreement, depending on the purchase price per share of such sales. We have included in this column only those shares of Class A Common Stock being offered for resale by Cantor under this prospectus, without regard to the Beneficial Ownership Limitation or the Exchange Cap. The assumed average purchase prices are solely for illustrative purposes and are not intended to be estimates or predictions of the future performance of our Class A Common Stock. |
(2) | Represents the Commitment Shares, which are the 396,826 shares of Class A Common Stock we agreed to issue to the Stockholder as consideration for its irrevocable commitment to purchase the shares of Class A Common Stock at our election in our sole discretion, from time to time after the date of this prospectus, upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement. |
(3) | The denominator used to calculate the percentages in this column is based on 166,790,324 shares of Common Stock outstanding as of June 30, 2022, adjusted to include the shares of Class A Common Stock (a) issued and sold to the Stockholder under the Facility and (b) issued to the Stockholder as the Upfront Commitment Fee. |
(4) | Purchase prices represent the illustrative aggregate purchase price to be received from the sale of all of the shares of Class A Common Stock issued and sold to the Stockholder under the Facility as set forth in the second column, multiplied by the VWAP Purchase Price, assuming for illustrative purposes that the VWAP Purchase Price is equal to 97.0% of the assumed trading price of Class A Common Stock listed in the first column. |
(5) | Represents the closing price of our Class A Common Stock on the NYSE on August 23, 2022, the trading day prior to the initial filing to the registration statement of which the prospectus forms a part. |
(6) | Represents the closing price of our Class A Common Stock on the NYSE on August 5, 2022, the trading day prior to the execution of the Purchase Agreement. |
• | continue to invest in our technology to improve capacity and reduce cost; |
• | deploy our network technology and capital equipment in additional domestic markets; |
• | sign up new subscribers; |
• | hire additional personnel; |
• | obtain, maintain, expand, and protect our intellectual property and FCC spectrum license portfolio; and |
• | operate as a public company. |
Three Months Ended June 30, |
$ |
% | ||||||||||||||
2022 |
2021 |
Change |
Change | |||||||||||||
Revenues |
$ | 7,754 | $ | 5,091 | $ | 2,663 | 52.3 | % | ||||||||
Cost of revenues |
(20,725 | ) | (13,318 | ) | (7,407 | ) | 55.6 | % | ||||||||
|
|
|
|
|
|
|
|
| ||||||||
Gross loss |
(12,971 | ) | (8,227 | ) | (4,744 | ) | 57.7 | % | ||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
(25,128 | ) | (16,028 | ) | (9,100 | ) | 56.8 | % | ||||||||
Research and development |
(7,810 | ) | (6,476 | ) | (1,334 | ) | 20.6 | % | ||||||||
|
|
|
|
|
|
|
|
| ||||||||
Total operating expenses |
(32,938 | ) | (22,504 | ) | (10,434 | ) | 46.4 | % | ||||||||
|
|
|
|
|
|
|
|
| ||||||||
Loss from operations |
(45,909 | ) | (30,731 | ) | (15,178 | ) | 49.4 | % | ||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(8,038 | ) | (4,926 | ) | (3,112 | ) | 63.2 | % | ||||||||
Other income (expense), net |
17,640 | (2,897 | ) | 20,537 | 708.9 | % | ||||||||||
|
|
|
|
|
|
|
|
| ||||||||
Total other income (expense) |
9,602 | (7,823 | ) | 17,425 | 222.7 | % | ||||||||||
Net loss |
(36,307 | ) | (38,554 | ) | 2,247 | (5.8 | )% | |||||||||
|
|
|
|
|
|
|
|
| ||||||||
Net loss per share of common stock, basic and diluted |
$ | (0.22 | ) | $ | (1.06 | ) | $ | 0.84 | (79.2 | )% | ||||||
|
|
|
|
|
|
|
|
| ||||||||
Weighted-average shares outstanding, basic and diluted |
162,423,594 | 36,410,177 | 126,013,418 | 346.1 | % | |||||||||||
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
$ |
% |
||||||||||||||
2022 |
2021 |
Change |
Change |
|||||||||||||
Revenues |
$ | 15,124 | $ | 9,614 | $ | 5,510 | 57.3 | % | ||||||||
Cost of revenues |
(38,916 | ) | (25,822 | ) | (13,094 | ) | 50.7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross loss |
(23,792 | ) | (16,208 | ) | (7,584 | ) | 46.8 | % | ||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
(50,218 | ) | (30,238 | ) | (19,980 | ) | 66.1 | % | ||||||||
Research and development |
(16,037 | ) | (12,418 | ) | (3,619 | ) | 29.1 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
(66,255 | ) | (42,656 | ) | (23,599 | ) | 55.3 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(90,047 | ) | (58,864 | ) | (31,183 | ) | 53.0 | % | ||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(15,568 | ) | (12,581 | ) | (2,987 | ) | 23.7 | % | ||||||||
Other income (expense), net |
15,675 | (8,155 | ) | 23,830 | 292.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income (expense) |
107 | (20,736 | ) | 20,843 | 100.5 | % | ||||||||||
Net loss |
(89,940 | ) | (79,600 | ) | (10,340 | ) | 13.0 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share of common stock, basic and diluted |
$ | (0.88 | ) | $ | (2.19 | ) | $ | 1.31 | (59.8 | )% | ||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares outstanding, basic and diluted |
102,357,494 | 36,325,426 | 66,032,069 | 181.8 | % | |||||||||||
|
|
|
|
|
|
|
|
Years Ended December 31, |
$ |
% |
||||||||||||||
2021 |
2020 |
Change |
Change |
|||||||||||||
Revenues |
$ | 22,263 | $ | 12,826 | $ | 9,437 | 73.6 | % | ||||||||
Cost of revenues |
(58,363 | ) | (38,529 | ) | (19,834 | ) | 51.5 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross loss |
(36,100 | ) | (25,703 | ) | (10,397 | ) | 40.5 | % | ||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative expenses |
(67,129 | ) | (55,240 | ) | (11,889 | ) | 21.5 | % | ||||||||
Research and development |
(26,308 | ) | (22,957 | ) | (3,351 | ) | 14.6 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
(93,437 | ) | (78,197 | ) | (15,240 | ) | 19.5 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(129,537 | ) | (103,900 | ) | (25,637 | ) | 24.7 | % | ||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(24,739 | ) | (19,382 | ) | (5,357 | ) | 27.6 | % | ||||||||
Other income (expense), net |
(12,269 | ) | (1,811 | ) | (10,458 | ) | 577.5 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other expense |
(37,008 | ) | (21,193 | ) | (15,815 | ) | 74.6 | % | ||||||||
Net loss |
$ | (166,545 | ) | $ | (125,093 | ) | $ | (41,452 | ) | 33.1 | % | |||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share of voting and non-voting common stock, basic and diluted |
$ | (4.55 | ) | $ | (3.50 | ) | $ | (1.05 | ) | 30.1 | % | |||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares outstanding, basic and diluted |
36,569,966 | 35,743,961 | 826,005 | 2.3 | % | |||||||||||
|
|
|
|
|
|
|
|
As of June 30, |
As of December 31, |
|||||||||||||||
2022 |
2021 |
2021 |
2020 |
|||||||||||||
Addressable Households |
9,691,029 | 9,691,029 | 9,691,029 | 9,691,029 | ||||||||||||
Homes Serviceable |
5,650,103 | 4,724,080 | 5,307,453 | 4,162,009 | ||||||||||||
Customer Relationships |
80,950 | 47,786 | 63,230 | 34,495 | ||||||||||||
Penetration of Homes Serviceable |
1.43 | % | 1.01 | % | 1.19 | % | 0.83 | % |
Three Months Ended June 30, |
Six Months Ended June 30, |
Years Ended December 31, |
||||||||||||||||||||||
2022 |
2021 |
2022 |
2021 |
2021 |
2020 |
|||||||||||||||||||
Revenue (000s) |
$ | 7,754 | $ | 5,091 | $ | 15,124 | $ | 9,614 | $ | 22,263 | $ | 12,826 | ||||||||||||
Average Revenue Per User (“ARPU”) |
$ | 33.96 | $ | 38.00 | $ | 34.96 | $ | 38.95 | $ | 37.97 | $ | 39.68 | ||||||||||||
Net Loss (000s) |
$ | (36,307 | ) | $ | (38,554 | ) | $ | (89,940 | ) | $ | (79,600 | ) | $ | (166,545 | ) | $ | (125,093 | ) | ||||||
Net Loss margin |
(468 | )% | (757 | )% | (595 | )% | (828 | )% | (748 | )% | (975 | )% | ||||||||||||
Adjusted EBITDA (000s) |
$ | (33,850 | ) | $ | (23,493 | ) | $ | (61,662 | ) | $ | (45,311 | ) | $ | (98,745 | ) | $ | (83,590 | ) | ||||||
Adjusted EBITDA margin |
(437 | )% | (461 | )% | (408 | )% | (471 | )% | (444 | )% | (652 | )% |
Three Months Ended June 30, |
Six Months Ended June 30, |
Year Ended December 31, |
||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) |
2022 |
2021 |
2022 |
2021 |
2021 |
2020 |
||||||||||||||||||||||||||||||||||||||||||
GAAP Net Loss ($) and Net Loss margin (%) |
$ |
(36,307 |
) |
(468 |
%) |
$ |
(38,554 |
) |
(757 |
%) |
$ |
(89,940 |
) |
(595 |
)% |
$ |
(79,600 |
) |
(828 |
)% |
$ |
(166,545 |
) |
(748 |
)% |
$ |
(125,093 |
) |
(975 |
)% | ||||||||||||||||||
Adjustments: |
||||||||||||||||||||||||||||||||||||||||||||||||
Add: Interest expense, net |
8,033 | 104 | % | 4,927 | 97 | % | 15,563 | 103 | % | 12,581 | 131 | % | 24,738 | 111 | % | 19,343 | 151 | % | ||||||||||||||||||||||||||||||
Add: Depreciation and amortization |
10,313 | 133 | % | 6,878 | 135 | % | 19,645 | 130 | % | 12,973 | 135 | % | 29,463 | 132 | % | 19,350 | 151 | % | ||||||||||||||||||||||||||||||
Add: Non-recurring transaction related expenses (1) |
755 | 10 | % | — | — | 4,042 | 27 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
(Subtract)/Add: (Gain)/loss on fair value adjustment of derivative liabilities |
(17,636 | ) | (227 | )% | 2,898 | 57 | % | (19,559 | ) | (129 | )% | 5,796 | 60 | % | 8,562 | 38 | % | 1,850 | 14 | % | ||||||||||||||||||||||||||||
Add: Recognition of distribution to non-redeeming shareholders |
— | — | — | — | 3,888 | 26 | % | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Add: Loss on extinguishment of debt |
— | — | — | — | — | — | 2,361 | 25 | % | 3,727 | 17 | % | — | — | ||||||||||||||||||||||||||||||||||
Add: Share-based compensation |
992 | 13 | % | 358 | 7 | % | 4,699 | 31 | % | 578 | 6 | % | 1,310 | 6 | % | 960 | 7 | % | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Adjusted EBITDA ($) and Adjusted EBITDA margin (%) |
$ |
(33,850 |
) |
(437 |
%) |
$ |
(23,493 |
) |
(461 |
%) |
$ |
(61,662 |
) |
(408 |
)% |
$ |
(45,311 |
) |
(471 |
)% |
$ |
(98,745 |
) |
(444 |
%) |
$ |
(83,590 |
) |
(652 |
%) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | We add back expenses that are related to transactions that occurred during the period that are expected to be non-recurring, including mergers and acquisitions and financings. Generally such expenses are included within selling, general and administrative expense in the condensed consolidated statements of operations. For the six months ended June 30, 2022, such transactions comprised of the Business Combination, the sale of the PIPE shares, the sale of the Series Z Preferred Stock shares, the registration for resale of both Class A common stock and private placement warrants as well as other financing costs. |
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
(in thousands) |
||||||||
Net cash provided by (used in) |
||||||||
Operating activities |
$ | (65,516 | ) | $ | (43,558 | ) | ||
Investing activities |
(37,584 | ) | (29,985 | ) | ||||
Financing activities |
173,398 | 132,689 | ||||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
$ | 70,298 | $ | 59,146 | ||||
|
|
|
|
|||||
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
(in thousands) |
||||||||
Net cash provided by (used in) |
||||||||
Operating activities |
$ | (98,583 | ) | $ | (78,945 | ) | ||
Investing activities |
(68,903 | ) | (35,906 | ) | ||||
Financing activities |
171,417 | 63,316 | ||||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
$ | 3,931 | $ | (51,535 | ) | |||
|
|
|
|
• | Use Licensed Millimeter Wave Spectrum. tens-of-millions |
• | Employ 802.11 Radios in Licensed Spectrum. Wi-Fi is one of the world’s most prevalent wireless technologies. It is based on a robust and frequently upgraded industry standard that enables high capacity and low-latency wireless connections. So instead of building a new radio technology or using the expensive mobile industry 5G ecosystem, we built our technology stack on top of Wi-Fi’s 802.11 standard. We then developed key intellectual property around the use of this radio technology in licensed spectrum domains with a combination of ultra-high spectral-efficiency smart-antenna technologies. The combination of proprietary front ends and global volume of Wi-Fi-based |
• | Design and Build the Fixed Wireless Technology and Deploy it on Telecommunications Infrastructure. |
• | Control the Network with a Natively Cloud-Based Core. |
• | Create a Unique Partner Ecosystem. |
* | Based on average Starry passing cost and fiber passing costs of up to $1,250 |
1 | Assumes 64 subscribers per sector |
• | First and foremost, we are driven by delivering a great service at a fair price, and are obsessed with customer satisfaction. We push ourselves to go above and beyond because doing the bare minimum is an anathema to our culture. |
• | We have a bias for action; we empower all employees at every level of our company to make smart and quick decisions when confronted with problems or opportunities. |
• | We trust that our colleagues make decisions that are anchored in a customer-first focus, and that those decisions are thoughtful and help drive us towards achieving our shared goals. |
• | We use data and analytics to help make smart and strategic decisions, but we do not let data and analytics overwhelm us and create paralysis or inaction. |
• | We have a passion for innovation and encourage intellectual curiosity. Innovation in the pursuit of solving hard problems is our motivation and we bring a conscientious and intentional approach to our solutions. |
Name |
Age |
Position | ||
Executive Officers |
||||
Chaitanya Kanojia |
53 | Chief Executive Officer and Director | ||
Komal Misra |
55 | Executive Vice President and Chief Financial Officer | ||
Joseph Lipowski |
64 | Executive Vice President and Chief Technology Officer | ||
Alex Moulle-Berteaux |
51 | Executive Vice President and Chief Operating Officer | ||
Virginia Lam Abrams |
43 | Executive Vice President, Government Affairs and Strategic Advancement | ||
William Lundregan |
52 | Executive Vice President, Chief Legal Officer and Secretary | ||
Jeremy MacKechnie |
36 | Executive Vice President, Head of People and Customer Experience | ||
Brian Regan |
39 | Executive Vice President, Strategy and Chief of Staff | ||
Non-Employee Directors |
||||
James Chiddix (1)(3) |
76 | Director | ||
Amish Jani (1)(2)(3) |
44 | Director | ||
Elizabeth A. Graham (1)(2)(3) |
52 | Director | ||
Robert L. Nabors II (2)(3) |
51 | Director |
(1) | Member of the audit committee. |
(2) | Member of the nominating and corporate governance committee. |
(3) | Member of the compensation committee. |
• | the Class I director is Elizabeth Graham and her term will expire at the annual meeting of stockholders to be held in 2023; |
• | the Class II directors are James Chiddix and Robert Nabors and their terms will expire at the annual meeting of stockholders to be held in 2024; and |
• | the Class III directors are Chaitanya Kanojia and Amish Jani and their terms will expire at the annual meeting of stockholders to be held in 2025. |
• | that a majority of our board of directors consist of directors who qualify as “independent” as defined under the rules of the NYSE; |
• | that we have a nominating and corporate governance committee composed entirely of independent directors; and |
• | that we have a compensation committee composed entirely of independent directors. |
• | Chaitanya Kanojia, President and Chief Executive Officer; |
• | Alex Moulle-Berteaux, Executive Vice President and Chief Operating Officer; and |
• | Joseph Lipowski, Executive Vice President and Chief Technology Officer. |
Name and Principal Position |
Year |
Salary ($) |
Bonus ($) |
Total ($) |
||||||||||||
Chaitanya Kanojia |
2021 | 300,861 | 100,000 | 400,861 | ||||||||||||
President and Chief Executive Officer |
2020 | 311,538 | 50,000 | 361,538 | ||||||||||||
Alex Moulle-Berteaux |
2021 | 300,000 | 89,977 | 389,977 | ||||||||||||
Executive Vice President and Chief Operating Officer |
2020 | 311,538 | 99,573 | 411,111 | ||||||||||||
Joseph Lipowski |
2021 | 250,809 | 50,025 | 300,834 | ||||||||||||
Executive Vice President and Chief Technology Officer |
2020 | 309,615 | 50,000 | 359,615 |
Option Awards |
||||||||||||||||||||
Name |
Grant Date |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
|||||||||||||||
Alex Moulle-Berteaux |
07/31/2015 | 360,000 | (1) | — | 0.077 | 07/30/2025 | ||||||||||||||
10/23/2018 | 2,086,241 | (1) | 481,441 | 0.32 | 10/22/2028 |
(1) | The options are subject to a four-year vesting schedule, with 25% of the shares subject to each stock option vesting on the first anniversary of the grant date and the remainder vesting in equal quarterly installments thereafter, subject to continued employment through each vesting date. The stock options granted to our named executive officers may be subject to accelerated vesting in the event of a Sale Event (as defined in the Starry Stock Plan) of the Company. |
Plan category: |
Number of Securities to be Issued Upon Exercise of Outstanding Options and RSUs (1) |
Weighted-Average Exercise Price of Outstanding Options (2) |
Number of Securities Available for Future Issuance Under Equity Compensation Plans (excludes securities reflected in first column) (3) |
|||||||||
Equity compensation plans approved by security holders |
16,801,520 | $ | 2.74 | 18,395,975 | ||||||||
Equity compensation plans not approved by security holders |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total |
16,801,520 | $ | 2.74 | 18,395,975 |
(1) | As of June 30, 2022, there were options to purchase 7,058,147 shares of Class A Common Stock and 809,002 RSUs outstanding under the Starry Stock Plan and 8,934,371 RSUs outstanding under the 2022 Incentive Award Plan. The Starry Stock Plan was terminated on March 29, 2022, upon which date the 2022 Incentive Award Plan and ESPP became effective. |
(2) | As of June 30, 2022, the weighted-average exercise price of outstanding options under the Starry Stock Plan was $2.74. As of June 30, 2022, no options had been granted under the 2022 Incentive Award Plan. The weighted average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding RSUs, which have no exercise price. |
(3) | As of June 30, 2022, an aggregate of 13,840,917 shares of our Class A Common Stock were available for issuance under the 2022 Incentive Award Plan and 4,555,058 shares of our Class A Common Stock were available for issuance under the ESPP. There are no shares available for future issuance under the Starry Stock Plan. |
• | each person who is our named executive officer or director; |
• | all of our executive officers and directors as a group; and |
• | each person who is a beneficial owner of more than 5% of our Class A Common Stock or our Class X Common Stock. |
Name and Address of Beneficial Owners |
Number of Shares of Class A Common Stock |
% of Shares of Class A Common Stock |
Number of Shares of Class X Common Stock |
% of Shares of Class X Common Stock |
% of Total Voting Power** |
|||||||||||||||
Five Percent Holders |
||||||||||||||||||||
Entities affiliated with FirstMark (1) |
24,565,818 | 15.6 | % | — | — | 7.2 | % | |||||||||||||
Entities affiliated with FMR LLC (2) |
22,441,137 | 14.2 | % | — | — | 6.5 | % | |||||||||||||
Affiliates of Tiger Global Management, LLC (3) |
19,352,325 | 12.3 | % | — | — | 5.6 | % | |||||||||||||
FirstMark Horizon Sponsor LLC (4) |
15,194,025 | 9.2 | % | — | — | 4.4 | % | |||||||||||||
Entities affiliated with ArrowMark (5) |
12,592,868 | 8.0 | % | — | — | 3.7 | % | |||||||||||||
QSI, Inc. (6) |
10,061,363 | 6.4 | % | — | — | 2.9 | % | |||||||||||||
Directors and Named Executive Officers |
||||||||||||||||||||
Chaitanya Kanojia (7) |
13,621,830 | 8.6 | % | 9,268,335 | 100.0 | % | 58.0 | % | ||||||||||||
Komal Misra (8) |
115,049 | * | — | — | * | |||||||||||||||
Joseph Lipowski |
5,522,363 | 3.5 | % | — | — | 1.6 | % | |||||||||||||
Alex Moulle-Bertreux (9) |
1,926,789 | 1.2 | % | — | — | * | ||||||||||||||
Amish Jani (1)(4) |
39,759,843 | 23.9 | % | — | — | 11.3 | % | |||||||||||||
James Chiddix |
70,773 | * | — | — | * | |||||||||||||||
Elizabeth Graham |
— | — | — | — | — | |||||||||||||||
Robert Nabors |
— | — | — | — | — | |||||||||||||||
All Directors and Executive Officers as a Group (12 Individuals) |
64,470,544 | 38.4 | % | 9,268,335 | 100.0 | % | 70.7 | % |
* | Less than one percent. |
** | Percentage of total voting power represents the combined voting power with respect to all shares of Class A Common Stock and Class X Common Stock, voting as a single class. Each share of Class X Common Stock is entitled to 20 votes per share, subject to certain limitations described in this prospectus and each share of Class A Common Stock is entitled to one vote per share. |
(1) | Consists of (i) 9,565,341 shares of Class A Common Stock owned by FirstMark Capital III, L.P., for itself and as nominee for FirstMark Capital III Entrepreneurs Fund, L.P.; (ii) 4,548,440 shares of Class A Common Stock owned by FirstMark Capital OF I L.P.; (iii) 2,695,372 shares of Class A Common Stock owned by FirstMark Capital OF II, L.P.; (iv) 2,582,691 shares of Class A Common Stock owned by FirstMark Capital OF III, L.P.; (v) 3,893,974 shares of Class A Common Stock owned by FirstMark Capital S1, L.P.; and (vi) 1,280,000 shares of Class A Common Stock owned by FirstMark Capital S2, L.P. Richard Heitzmann and Amish Jani are the managing members of FirstMark Capital III GP, LLC, the general partner of FirstMark Capital III, L.P., the managing members of FirstMark Capital OF I GP, LLC, the general partner of FirstMark Capital OF I, L.P., the managing members of FirstMark Capital OF II GP, LLC, the general partner of FirstMark Capital OF II, L.P., the managing members of FirstMark Capital OF III GP, LLC, the general partner of FirstMark Capital OF III, L.P., the managing members of FirstMark Capital S1 GP, LLC, the general partner of FirstMark Capital S1, L.P. and the managing members of FirstMark Capital S2 GP, LLC, the general partner of FirstMark Capital S2, L.P. The address of each of the entities in this footnote is 100 Fifth Ave, 3rd Floor, New York, NY 10011. |
(2) | Consists of (i) 199,782 shares of Class A Common Stock owned by Fidelity Securities Fund: Fidelity Blue Chip Growth K6 Fund; (ii) 3,359 shares of Class A Common Stock owned by Fidelity Securities Fund: Fidelity Flex Large Cap Growth Fund; (iii) 333,389 shares of Class A Common Stock owned by Fidelity Securities Fund: Fidelity OTC Portfolio; (iv) 210,621 shares of Class A Common Stock owned by Variable Insurance Products Fund III: VIP Growth Opportunities Portfolio; (v) 259,518 shares of Class A Common Stock owned by FIAM Target Date Blue Chip Growth Commingled Fund, by Fidelity Institutional Asset Management Trust Company, as Trustee; (vi) 1,433,321 shares of Class A Common Stock owned by Fidelity Advisor Series I: Fidelity Advisor Growth Opportunities Fund; (vii) 112,095 shares of Class A Common Stock owned by Fidelity Blue Chip Growth Commingled Pool, by Fidelity Management Trust Company, as Trustee; (viii) 7,059,820 shares of Class A Common Stock owned by Fidelity Growth Company Commingled Pool, by Fidelity Management Trust Company, as Trustee; (ix) 1,218,562 shares of Class A Common Stock owned by Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund; (x) 6,868 shares of Class A Common Stock owned by Fidelity OTC Commingled Pool, by Fidelity Management Trust Company, as Trustee; (xi) 2,949,276 shares of Class A Common Stock owned by Fidelity Securities Fund: Fidelity Blue Chip Growth Fund; (xii) 6,890,907 shares of Class A Common Stock owned by Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund; (xiii) 1,338,789 shares of Class A Common Stock owned by Fidelity Mt. Vernon Street Trust: Fidelity Growth Company K6 Fund; (xiv) 3,285 shares of Class A Common Stock owned by Fidelity Blue Chip Growth Institutional Trust, by its manager Fidelity Investments Canada ULC; (xv) 70,422 shares of Class A Common Stock owned by Fidelity Advisor Series I: Fidelity Advisor Series Growth Opportunities Fund; (xvi) 346,148 shares of Class A Common Stock owned by Fidelity Securities Fund: Fidelity Series Blue Chip Growth Fund; and (xvii) 4,975 shares of Class A Common Stock owned by Fidelity U.S. Growth Opportunities Investment Trust by its manager Fidelity Investments Canada ULC. These accounts are managed by direct or indirect subsidiaries of FMR LLC. Abigail P. Johnson is a Director, the Chairman, the Chief Executive Officer and the President of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940 (the “Investment Company Act”), to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (the “Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The address for each of the Fidelity entities identified in this footnote is 245 Summer Street, Boston, Massachusetts 02210. |
(3) | Consists of 19,352,325 shares of Class A Common Stock held by Tiger Global Long Opportunities Master Fund, L.P. and other entities and/or persons affiliated with Tiger Global Management, LLC. Tiger Global Management, LLC is controlled by Chase Coleman and Scott Shleifer. The business address for each of these entities is c/o Tiger Global Management, LLC, 9 West 57th Street, 35th Floor, New York, New York 10019. |
(4) | Consists of (i) 2,557,500 shares of Class A Common Stock held by the Sponsor; (ii) 4,128,113 Earnout Shares; and (iii) 8,508,413 shares of Class A Common Stock issuable upon the exercise of warrants. The managers of the Sponsor, Messrs. Heitzmann and Jani, by virtue of their shared control over the Sponsor, may be deemed to beneficially own shares held by the Sponsor. Messrs. Heitzmann and Jani are also the managers of the entities affiliated with FirstMark, and by virtue of their shared control over such entities, may be deemed to beneficially own shares held by such entities. The address of the Sponsor is c/o FirstMark Horizon Acquisition Corp., 100 5th Ave, 3rd Floor, New York, New York 10011. |
(5) | Consists of 246,128 shares of Class A Common Stock owned by ArrowMark Colorado Holdings LLC (“ArrowMark”) and 12,346,740 shares of Class A Common Stock held by various entities and persons for which ArrowMark acts as the investment advisor with respect to such shares. None of the various entities and persons holding shares through accounts managed by ArrowMark is individually a beneficial owner of more than 5% of our Class A Common Stock. Mr. Corkins is the managing member of ArrowMark. The address for Arrow Colorado and Mr. Corkins is c/o ArrowMark Partners, 100 Fillmore St, Suite 325, Denver, CO 80206. |
(6) | Consists of 10,061,363 shares of Class A Common Stock owned by QSI, Inc. (“QSI”). QSI is a wholly owned subsidiary of Quanta. Quanta, a publicly traded company, holds ultimate voting and investment power over the shares of Class A Common Stock held by QSI. The address for QSI and Quanta is 2800 Post Oak Boulevard, Suite 2600, Houston, TX 77056. |
(7) | Consists of (i) 9,268,335 shares of Class X Common Stock held by Mr. Kanojia; (ii) 368,158 shares of Class A Common Stock held by Chaitanya Kanojia Qualified Annuity Interest Trust, of which Mr. Kanojia serves as trustee; (iii) 12,885,514 shares of Class A Common Stock held by Tracie Longman, Mr. Kanojia’s spouse; and (iv) 368,158 shares of Class A Common Stock held by the Tracie L. Longman Qualified Annuity Interest Trust, of which Ms. Longman serves as trustee. |
(8) | Consists of 115,049 shares of Class A Common Stock issuable upon exercise of options within 60 days. |
(9) | Includes 509,382 shares of Class A Common Stock issuable upon exercise of options within 60 days. |
Number of Shares of Class A Common Stock Owned Prior to Offering |
Maximum Number of Shares of Class A Common Stock Which May be Offered Pursuant to this Prospectus |
Number of Shares of Class A Common Stock Owned After Offering | ||||||||
Name of Selling Stockholder |
Number (1) |
Percent (2) |
Number (3) |
Percent (2) | ||||||
CF Principal Investments LLC (4) |
396,826 | * | 33,000,000 | — | — |
* | Represents beneficial ownership of less than 1% of the outstanding shares of our Class A Common Stock. |
(1) | Represents the Commitment Shares, which are the 396,826 shares of Class A Common Stock that we issued to Cantor in consideration of its irrevocable commitment to purchase shares of Class A Common Stock at our election under the Purchase Agreement. In accordance with Rule 13d-3(d) under the Exchange Act, we have excluded from the number of shares beneficially owned prior to the offering all of the shares that Cantor may be required to purchase under the Purchase Agreement, because the issuance of such shares of Class A Common Stock is solely at our discretion and is subject to conditions contained in the Purchase Agreement, the satisfaction of which are entirely outside of Cantor’s control, including the registration statement that includes this prospectus becoming and remaining effective. Furthermore, the VWAP Purchases of Class A Common Stock are subject to certain agreed upon maximum amount limitations set forth in the Purchase Agreement. Also, the Purchase Agreement prohibits us from issuing and selling any shares of Class A Common Stock to Cantor to the extent such shares of Class A Common Stock, when aggregated with all other shares of Class A Common Stock then beneficially owned by Cantor, would cause Cantor’s beneficial ownership of our Class A Common Stock to exceed 4.99%. The Purchase Agreement also prohibits us from issuing or selling shares of Class A Common Stock under the Purchase Agreement in excess of the 19.99% Exchange Cap, unless (i) we obtain stockholder approval to issue shares of Class A Common Stock in excess of the Exchange Cap in accordance with applicable NYSE rules, (ii) all applicable sales of shares of Class A Common Stock under the Purchase Agreement equal or exceed the “Minimum Price” (as such term is defined in Section 312.03 of the NYSE Listed Company Manual), or (iii) as to any VWAP Purchase, the issuance of the Class A Common Stock pursuant to a VWAP Purchase Notice to the Stockholder would be excluded from the Exchange Cap under NYSE rules (or interpretive guidance provided by the NYSE with respect thereto). Neither the Beneficial Ownership Limitation nor the Exchange Cap (to the extent applicable under NYSE rules) may be amended or waived under the Purchase Agreement. |
(2) | Applicable percentage ownership is based on 157,521,989 shares of Class A Common Stock outstanding as of June 30, 2022. |
(3) | Assumes the sale of all shares of Class A Common Stock being offered pursuant to this prospectus. |
(4) | CF Group Management, Inc. (“CFGM”) is the managing general partner of Cantor Fitzgerald, L.P. (“CFLP”) and directly or indirectly controls the managing general partner of Cantor Fitzgerald Securities (“CFS”), the sole member of Cantor. Howard Lutnick is Chairman and Chief Executive of CFGM and trustee of CFGM’s sole stockholder. CFLP, indirectly, holds a majority of the ownership interests in CFS, and therefore also indirectly, Cantor. As such, each of CFLP, CFGM, CFS and Mr. Lutnick may be deemed to have beneficial ownership of the securities directly held by Cantor. Each such entity or person disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest they may have therein, directly or indirectly. The foregoing should not be construed in and of itself as an admission by any of CFLP, CFGM, CFS or Mr. Lutnick as to beneficial ownership of the securities beneficially owned, directly, by Cantor. The business address of Cantor is 110 East 59th Street, New York, NY 10022. |
Name |
Shares of Starry Series E-1 Preferred Stock |
Total Purchase Price |
||||||
Entities affiliated with ArrowMark (1) |
2,003,357 | $ | 2,864,814 | |||||
Entities affiliated with FirstMark Capital (2) |
1,670,162 | $ | 2,349,138 | |||||
Entities affiliated with FMR LLC (3) |
15,026,926 | $ | 21,140,327 | |||||
Name |
Shares of Starry Series E-2 Preferred Stock |
Total Purchase Price |
||||||
Entities affiliated with ArrowMark (1) |
1,124,555 | $ | 1,506,904 | |||||
Entities affiliated with FirstMark Capital (2) |
2,249,110 | $ | 3,000,000 | |||||
Tiger Global Private Investment Partners IX, LP (4) |
3,747,752 | $ | 5,021,988 | |||||
Name |
Shares of Starry Series E-3 Preferred Stock |
Total Purchase Price |
||||||
QSI, Inc. (5) |
53,571,428 | $ | 90,000,000 | |||||
Entities affiliated with FMR LLC (3) |
14,880,952 | $ | 25,000,000 |
(1) | Entities affiliated with ArrowMark held more than 5% of Starry’s outstanding capital stock. |
(2) | Entities affiliated with FirstMark Capital held more than 5% of Starry’s outstanding capital stock. |
(3) | Entities affiliated with FMR LLC held more than 5% of Starry’s outstanding capital stock. |
(4) | Tiger Global Private Investment Partners IX, LP held more than 5% of Starry’s outstanding capital stock. |
(5) | QSI, Inc., a wholly owned affiliate of Quanta, held more than 5% of Starry’s outstanding capital stock. |
Name |
Principal Amount |
Security Converted Into | ||||
Entities affiliated with ArrowMark (1) |
$ | 2,818,710 | Starry Series E-1 Preferred Stock | |||
Entities affiliated with ArrowMark (1) |
$ | 1,500,000 | Starry Series E-2 Preferred Stock | |||
Entities affiliated with FirstMark Capital (2) |
$ | 2,349,138 | Starry Series E-1 Preferred Stock | |||
Entities affiliated with FirstMark Capital (2) |
$ | 3,000,000 | Starry Series E-2 Preferred Stock | |||
Entities affiliated with FMR LLC (3) |
$ | 21,140,327 | Starry Series E-1 Preferred Stock | |||
Tiger Global Private Investment Partners IX, LP (4) |
$ | 5,021,988 | Starry Series E-2 Preferred Stock |
(1) | Entities affiliated with ArrowMark held more than 5% of Starry’s outstanding capital stock. |
(2) | Entities affiliated with FirstMark Capital held more than 5% of Starry’s outstanding capital stock. |
(3) | Entities affiliated with FMR LLC held more than 5% of Starry’s outstanding capital stock. |
(4) | Tiger Global Private Investment Partners IX, LP held more than 5% of Starry’s outstanding capital stock. |
Name |
Shares of Series D Preferred Stock |
Total Purchase Price |
||||||
Entities affiliated with ArrowMark (1) |
6,993,008 | $ | 10,000,001 | |||||
Entities affiliated with FirstMark Capital (2) |
26,504,099 | $ | 37,900,862 | |||||
Entities affiliated with FMR LLC (3) |
34,167,603 | $ | 48,859,672 | |||||
Tiger Global Private Investment Partners IX, LP (4) |
14,615,385 | $ | 20,900,001 |
(1) | Entities affiliated with ArrowMark held more than 5% of Starry’s outstanding capital stock. |
(2) | Entities affiliated with FirstMark Capital held more than 5% of Starry’s outstanding capital stock. |
(3) | Entities affiliated with FMR LLC held more than 5% of Starry’s outstanding capital stock. |
(4) | Tiger Global Private Investment Partners IX, LP held more than 5% of Starry’s outstanding capital stock. |
Name |
Shares of Series C Preferred Stock |
Total Purchase Price |
||||||
Entities affiliated with ArrowMark (1) |
13,015,185 | $ | 12,000,001 | |||||
Entities affiliated with FirstMark Capital (2) |
21,691,974 | $ | 20,000,000 | |||||
Entities affiliated with FMR LLC (3) |
18,980,477 | $ | 17,500,000 | |||||
Tiger Global Private Investment Partners IX, LP (4) |
39,926,790 | $ | 36,812,500 |
(1) | Entities affiliated with ArrowMark held more than 5% of Starry’s outstanding capital stock. |
(2) | Entities affiliated with FirstMark Capital held more than 5% of Starry’s outstanding capital stock. |
(3) | Entities affiliated with FMR LLC held more than 5% of Starry’s outstanding capital stock. |
(4) | Tiger Global Private Investment Partners IX, LP held more than 5% of Starry’s outstanding capital stock. |
• | any person who is, or at any time during the applicable period was, one of our executive officers or a member of our board of directors; |
• | any person who is known by us to be the beneficial owner of more than 5% of our voting stock; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law sister-in-law |
• | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest. |
• | the adjustment to the warrant price of the warrants from $11.50 per 1.2415 shares to $9.13 per 1.2415 shares of Class A Common Stock (representing 115% of the Market Value (as defined below)); |
• | the adjustment of the $18.00 per share redemption trigger price described in Sections 6.1 and 6.2 of the Warrant Agreement to $14.29 per share of Class A Common Stock (representing 180% of the Market Value); and |
• | the adjustment of the $10.00 per share redemption trigger price described in Section 6.2 of the Warrant Agreement to $7.94 per share of Class A Common Stock (representing the Market Value). |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; |
• | if, and only if, the last reported sale price of our Class A Common Stock for any 20-trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders (which we refer to as the “Reference Value”) equals or exceeds $14.29 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Warrants— Public Warrants—Anti-dilution Adjustments”). |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Class A Common Stock (as defined below) except as otherwise described below; |
• | if, and only if, the Reference Value (as defined above under “Redemption of warrants when the price per share of Class A Common Stock equals or exceeds $14.29”) equals or exceeds $7.94 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Warrants—Public Stockholders’ Warrants—Anti-dilution Adjustments”); and |
• | if the Reference Value is less than $14.29 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments”), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above. |
Redemption Date (period to expiration of warrants) |
Fair Market Value of Class A Common Stock |
|||||||||||||||||||||||||||||||||||
≤ 7.94 |
8.73 |
9.53 |
10.32 |
11.12 |
11.91 |
12.70 |
13.50 |
≥ 14.29 |
||||||||||||||||||||||||||||
60 months |
0.3240315 | 0.3488615 | 0.3687255 | 0.3861065 | 0.4022460 | 0.4183855 | 0.4320420 | 0.4444570 | 0.4481815 | |||||||||||||||||||||||||||
57 months |
0.3190655 | 0.3438955 | 0.3650010 | 0.3848650 | 0.4022460 | 0.4183855 | 0.4320420 | 0.4444570 | 0.4481815 | |||||||||||||||||||||||||||
54 months |
0.3128580 | 0.3376880 | 0.3612765 | 0.3811405 | 0.3997630 | 0.4159025 | 0.4308005 | 0.4432155 | 0.4481815 | |||||||||||||||||||||||||||
51 months |
0.3054090 | 0.3327220 | 0.3563105 | 0.3774160 | 0.3972800 | 0.4134195 | 0.4295590 | 0.4432155 | 0.4481815 | |||||||||||||||||||||||||||
48 months |
0.2992015 | 0.3265145 | 0.3513445 | 0.3736915 | 0.3935555 | 0.4121780 | 0.4270760 | 0.4419740 | 0.4481815 | |||||||||||||||||||||||||||
45 months |
0.2917525 | 0.3203070 | 0.3463785 | 0.3699670 | 0.3910725 | 0.4096950 | 0.4258345 | 0.4419740 | 0.4481815 | |||||||||||||||||||||||||||
42 months |
0.2830620 | 0.3128580 | 0.3401710 | 0.3650010 | 0.3873480 | 0.4072120 | 0.4245930 | 0.4407325 | 0.4481815 | |||||||||||||||||||||||||||
39 months |
0.2743715 | 0.3054090 | 0.3339635 | 0.3600350 | 0.3836235 | 0.4034875 | 0.4221100 | 0.4394910 | 0.4481815 | |||||||||||||||||||||||||||
36 months |
0.2644395 | 0.2967185 | 0.3265145 | 0.3538275 | 0.3786575 | 0.4010045 | 0.4208685 | 0.4382495 | 0.4481815 | |||||||||||||||||||||||||||
33 months |
0.2545075 | 0.2880280 | 0.3190655 | 0.3476200 | 0.3736915 | 0.3972800 | 0.4183855 | 0.4370080 | 0.4481815 | |||||||||||||||||||||||||||
30 months |
0.2433340 | 0.2780960 | 0.3103750 | 0.3401710 | 0.3687255 | 0.3923140 | 0.4159025 | 0.4357665 | 0.4481815 | |||||||||||||||||||||||||||
27 months |
0.2296775 | 0.2656810 | 0.3004430 | 0.3327220 | 0.3612765 | 0.3885895 | 0.4121780 | 0.4345250 | 0.4481815 | |||||||||||||||||||||||||||
24 months |
0.2147795 | 0.2532660 | 0.2892695 | 0.3227900 | 0.3538275 | 0.3823820 | 0.4084535 | 0.4320420 | 0.4481815 | |||||||||||||||||||||||||||
21 months |
0.1998815 | 0.2396095 | 0.2768545 | 0.3128580 | 0.3463785 | 0.3774160 | 0.4047290 | 0.4308005 | 0.4481815 | |||||||||||||||||||||||||||
18 months |
0.1812590 | 0.2222285 | 0.2619565 | 0.3004430 | 0.3364465 | 0.3699670 | 0.3997630 | 0.4283175 | 0.4481815 | |||||||||||||||||||||||||||
15 months |
0.1613950 | 0.2036060 | 0.2445755 | 0.2855450 | 0.3252730 | 0.3612765 | 0.3935555 | 0.4245930 | 0.4481815 | |||||||||||||||||||||||||||
12 months |
0.1378065 | 0.1812590 | 0.2247115 | 0.2681640 | 0.3103750 | 0.3501030 | 0.3873480 | 0.4208685 | 0.4481815 | |||||||||||||||||||||||||||
9 months |
0.1117350 | 0.1551875 | 0.2011230 | 0.2470585 | 0.2942355 | 0.3376880 | 0.3786575 | 0.4171440 | 0.4481815 | |||||||||||||||||||||||||||
6 months |
0.0806975 | 0.1229085 | 0.1700855 | 0.2209870 | 0.2718885 | 0.3215485 | 0.3674840 | 0.4109365 | 0.4481815 | |||||||||||||||||||||||||||
3 months |
0.0422110 | 0.0806975 | 0.1291160 | 0.1862250 | 0.2445755 | 0.3016845 | 0.3550690 | 0.4047290 | 0.4481815 | |||||||||||||||||||||||||||
0 months |
— | — | 0.0521430 | 0.1427725 | 0.2222285 | 0.2892695 | 0.3488615 | 0.4010045 | 0.4481815 |
• | our board of directors approved the acquisition prior to its consummation; |
• | the interested stockholder owned at least 85% of the outstanding voting stock upon consummation of the acquisition; or |
• | the business combination is approved by our board of directors, and by a two-thirds vote of the other stockholders in a meeting. |
• | 1% of the total number of shares of our Common Stock then outstanding; and |
• | the average weekly reported trading volume of our Common Stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale. |
• | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
• | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
• | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
• | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
• | purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus; |
• | ordinary brokerage transactions and transactions in which the broker solicits purchasers; |
• | block trades in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
• | an over-the-counter |
• | through trading plans entered into by the Stockholder pursuant to Rule 10b5-1 under the Exchange Act, that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans; |
• | to or through underwriters or broker-dealers; |
• | in privately negotiated transactions; |
• | in options transactions; |
• | through a combination of any of the above methods of sale; or |
• | any other method permitted pursuant to applicable law. |
Page |
||||
Starry Group Holdings, Inc. Audited Consolidated Financial Statements |
||||
F-2 | ||||
F-3 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
Starry Group Holdings, Inc. Unaudited Condensed Consolidated Financial Statements |
||||
F-36 | ||||
F-37 | ||||
F-38 | ||||
F-39 | ||||
F-40 |
Deloitte & Touche LLP 200 Berkeley Street Boston, MA 02116-5022 USA Tel: +1 617 437 2000 www.deloitte.com |
December 31, 2021 |
December 31, 2020 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 29,384 | $ | 25,594 | ||||
Restricted cash |
— | 110 | ||||||
Accounts receivable, net |
380 | 264 | ||||||
Deferred costs |
7,049 | — | ||||||
Prepaid expenses and other current assets |
7,079 | 1,840 | ||||||
Total current assets |
43,892 | 27,808 | ||||||
Property and equipment, net |
129,019 | 86,658 | ||||||
Intangible assets |
48,463 | 48,463 | ||||||
Restricted cash and other assets |
1,860 | 1,361 | ||||||
Total assets |
$ | 223,234 | $ | 164,290 | ||||
Liabilities and stockholders’ equity (deficit) |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 6,832 | $ | 7,457 | ||||
Unearned revenue |
1,630 | 1,169 | ||||||
Current portion of debt |
1,504 | 29,875 | ||||||
Accrued expenses and other current liabilities |
23,177 | 13,073 | ||||||
Total current liabilities |
33,143 | 51,574 | ||||||
Debt, net of current portion |
191,596 | 133,932 | ||||||
Asset retirement obligations |
2,387 | 1,399 | ||||||
Warrant liabilities |
14,773 | — | ||||||
Other liabilities |
12,412 | 3,068 | ||||||
Total liabilities |
254,311 | 189,973 | ||||||
Year Ended December 31, 2021 |
Year Ended December 31, 2020 |
|||||||
Commitments and contingencies (Note 12) |
||||||||
Stockholders’ equity (deficit): |
||||||||
Seed series convertible preferred stock; $0.0001 par value; 9,761,747 shares authorized; 9,761,745 shares issued and outstanding at December 31, 2021 and December 31, 2020 (liquidation preference of $7,000) |
6,990 | 6,990 | ||||||
Series A convertible preferred stock; $0.0001 par value; 16,852,283 shares authorized, issued and outstanding at December 31, 2021 and December 31, 2020 (liquidation preference of $26,000) |
25,946 | 25,946 | ||||||
Series B convertible preferred stock; $0.0001 par value; 10,207,696 shares authorized, issued and outstanding at December 31, 2021 and December 31, 2020 (liquidation preference of $30,000) |
29,910 | 29,910 | ||||||
Series C convertible preferred stock; $0.0001 par value; 19,965,160 shares authorized, issued and outstanding at December 31, 2021 and December 31, 2020 (liquidation preference of $100,000) |
99,989 | 99,989 | ||||||
Series D convertible preferred stock; $0.0001 par value; 16,090,802 shares authorized, issued and outstanding at December 31, 2021 and December 31, 2020 (liquidation preference of $125,000) |
124,915 | 124,915 | ||||||
Series E convertible preferred stock; $0.0001 par value; 19,299,164 shares authorized; 18,751,311 and 0 issued and outstanding at December 31, 2021 and December 31, 2020, respectively (liquidation preference of $162,784) |
165,434 | — | ||||||
Common stock; $0.0001 par value; 150,024,203 shares authorized; 37,178,873 and 36,155,835 issued and outstanding at December 31, 2021 and December 31, 2020, respectively |
14 | 9 | ||||||
Additional paid-in capital |
17,096 | 21,384 | ||||||
Accumulated deficit |
(501,371 | ) | (334,826 | ) | ||||
Total stockholders’ (deficit) equity |
(31,077 | ) | (25,683 | ) | ||||
Total liabilities and stockholders’ (deficit) equity |
$ | 223,234 | $ | 164,290 | ||||
For the Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Revenues |
$ | 22,263 | $ | 12,826 | ||||
Cost of revenues |
(58,363 | ) | (38,529 | ) | ||||
|
|
|
|
|||||
Gross loss |
(36,100 | ) | (25,703 | ) | ||||
Operating expenses: |
||||||||
Selling, general and administrative |
(67,129 | ) | (55,240 | ) | ||||
Research and development |
(26,308 | ) | (22,957 | ) | ||||
|
|
|
|
|||||
Total operating expenses |
(93,437 | ) | (78,197 | ) | ||||
|
|
|
|
|||||
Loss from operations |
(129,537 | ) | (103,900 | ) | ||||
Other income (expense): |
||||||||
Interest expense |
(24,739 | ) | (19,382 | ) | ||||
Other income (expense), net |
(12,269 | ) | (1,811 | ) | ||||
|
|
|
|
|||||
Total other expense |
(37,008 | ) | (21,193 | ) | ||||
|
|
|
|
|||||
Net loss |
$ | (166,545 | ) | $ | (125,093 | ) | ||
|
|
|
|
|||||
Net loss per share of voting and non-voting common stock, basic and diluted |
$ | (4.55 | ) | $ | (3.50 | ) | ||
|
|
|
|
|||||
Weighted-average shares outstanding, basic and diluted |
36,569,966 | 35,743,961 | ||||||
|
|
|
|
Series Seed Convertible Preferred Stock |
Series A Convertible Preferred Stock |
Series B Convertible Preferred Stock |
Series C Convertible Preferred Stock |
Series D Convertible Preferred Stock |
Series E Convertible Preferred Stock |
Common Stock |
Additional Paid-In Capital |
Accumulated Stockholders’ |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Par Value |
Deficit |
(Deficit) Equity |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
53,030,260 | $ | 6,990 | 91,549,300 | $ | 25,946 | 55,452,865 | $ | 29,910 | 108,459,871 | $ | 99,989 | 65,909,090 | $ | 94,177 | — | $ | — | 194,974,082 | $ | 6 | $ | 16,312 | $ | (209,733 | ) | $ | 63,597 | ||||||||||||||||||||||||||||||||||||||||
Retroactive application of Business Combination |
(43,268,515 |
) |
— |
(74,697,017 |
) |
— |
(45,245,169 |
) |
— |
(88,497,711 |
) |
— |
(53,776,625 |
) |
— |
— |
— |
(159,083,491 |
) |
(2 |
) |
$ |
2 |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Adjusted Balance, beginning of period |
9,761,745 |
$ |
6,990 |
16,852,283 |
$ |
25,946 |
10,207,696 |
$ |
29,910 |
19,965,160 |
$ |
99,989 |
12,132,465 |
$ |
94,177 |
— |
$ |
— |
35,890,591 |
$ |
4 |
$ |
16,314 |
$ |
(209,733 |
) |
$ |
63,597 |
||||||||||||||||||||||||||||||||||||||||
Issuance of Series D convertible preferred stock, net of issuance costs of $12 |
— | — | — | — | — | — | — | — | 3,958,337 | 30,738 | — | — | — | — | — | $ | 30,738 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of beneficial conversion feature on convertible notes |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | 3,932 | $ | 3,932 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock options |
— | — | — | — | — | — | — | — | — | — | — | — | 265,244 | — |
183 | — | $ | 183 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock warrants |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
$ |
— |
||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | 960 | — | $ | 960 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (125,093 | ) | $ | (125,093 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
9,761,745 |
6,990 |
16,852,283 |
25,946 |
10,207,696 |
29,910 |
19,965,160 |
99,989 |
16,090,802 |
124,915 |
— |
— |
36,155,835 |
4 |
21,389 |
(334,826 |
) |
(25,683 |
) | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
53,030,260 | 6,990 | 91,549,300 | 25,946 | 55,452,865 | 29,910 | 108,459,871 | 99,989 | 87,412,587 | 124,915 | — | — | 196,415,008 | 9 | 21,384 | (334,826 | ) | $ |
(25,683 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Retroactive application of Business Combination |
(43,268,515 |
) |
— |
(74,697,017 |
) |
— |
(45,245,169 |
) |
— |
(88,497,711 |
) |
— |
(71,321,785 |
) |
— |
— |
— |
(160,259,173 |
) |
(5 |
) |
5 |
— |
— |
||||||||||||||||||||||||||||||||||||||||||||
|
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|||||||||||||||||||||||||||||||||||
Adjusted Balance, beginning of period |
9,761,745 |
6,990 |
16,852,283 |
25,946 |
10,207,696 |
29,910 |
19,965,160 |
99,989 |
16,090,802 |
124,915 |
— |
— |
36,155,835 |
4 |
21,389 |
(334,826 |
) |
(25,683 |
) | |||||||||||||||||||||||||||||||||||||||||||||||||
Recognition of beneficial conversion feature on convertible notes |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
$ |
— |
||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants |
— | — | — | — | — | — | — | — | — | — | — | — | 422,095 | — |
— |
— | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock options |
— | — | — | — | — | — | — | — | — | — | — | — | 600,943 | — |
752 | — | $ | 752 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs of $150 |
— | — | — | — | — | — | — | — | — | — | 13,148,484 | 119,850 | — | — | — | — | $ | 119,850 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of convertible notes payable to Series E convertible preferred stock |
— | — | — | — | — | — | — | — | — | — | 5,602,827 | 45,584 | — | — | — | — | $ | 45,584 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of 2019 warrants to liabilities |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | (6,345 | ) | — | $ | (6,345 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | 1,310 | — | $ | 1,310 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | — | — | — | — | — | (166,545 | ) | $ | (166,545 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
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|
|||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
9,761,745 | 6,990 | 16,852,283 | 25,946 | 10,207,696 | 29,910 | 19,965,160 | 99,989 | 16,090,802 | 124,915 | 18,751,311 | 165,434 | 37,178,873 | 4 | 17,106 | (501,371 | ) | (31,077 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
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|||||||||||||||||||||||||||||||||||
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Operating activities: |
||||||||
Net loss |
$ | (166,545 | ) | $ | (125,093 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization expense |
29,463 | 19,350 | ||||||
Paid-in-kind interest |
18,203 | 15,427 | ||||||
Amortization of debt discount and deferred charges |
5,438 | 3,820 | ||||||
Conversion of debt discount |
971 | — | ||||||
Loss on extinguishment of debt |
3,727 | — | ||||||
Fair value adjustment of derivative liability |
8,562 | 1,850 | ||||||
Loss on disposal of property and equipment |
2,216 | 1,549 | ||||||
Share-based compensation |
1,310 | 960 | ||||||
Accretion of asset retirement obligations |
205 | 114 | ||||||
Provision for doubtful accounts |
154 | 117 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(270 | ) | (327 | ) | ||||
Prepaid expenses and other current assets |
(5,240 | ) | 162 | |||||
Other assets |
(248 | ) | (2 | ) | ||||
Accounts payable |
(1,249 | ) | 676 | |||||
Unearned revenue |
461 | 832 | ||||||
Accrued expenses and other current liabilities |
3,477 | 402 | ||||||
Other liabilities |
782 | 1,218 | ||||||
Net cash used in operating activities |
(98,583 | ) | (78,945 | ) | ||||
Investing activities: |
||||||||
Purchases of property and equipment |
(68,903 | ) | (35,906 | ) | ||||
Net cash used in investing activities |
(68,903 | ) | (35,906 | ) | ||||
Financing activities: |
||||||||
Proceeds from the issuance of convertible notes payable and beneficial conversion feature on convertible notes |
11,000 | 31,243 | ||||||
Proceeds from Strategic Partner Arrangement |
3,342 | 1,722 | ||||||
Proceeds from exercise of common stock options |
752 | 183 | ||||||
Proceeds from issuance of Series D preferred stock, net of issuance costs |
— | 30,738 | ||||||
Proceeds from the issuance of Series E Preferred Stock, net of issuance costs |
119,850 | — | ||||||
Proceeds from the issuance of term loans, net of issuance costs |
38,500 | — | ||||||
Payments of third-party issuance costs in connection with Term Loans |
(264 | ) | — | |||||
Payments of deferred transaction costs |
(975 | ) | — | |||||
Repayments of capital lease obligations, net |
(788 | ) | (570 | ) | ||||
Net cash provided by financing activities |
171,417 | 63,316 | ||||||
Net increase (decrease) in cash and cash equivalents and restricted cash: |
3,931 | (51,535 | ) | |||||
Cash and cash equivalents and restricted cash, beginning of period |
26,831 | 78,366 | ||||||
Cash and cash equivalents and restricted cash, end of period |
$ | 30,762 | $ | 26,831 |
• | Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. |
• | Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). |
• | Income approach: Techniques to convert future amounts to a single present value amount based upon market expectations (including present value techniques, option pricing and excess earnings models) |
As of October 6, 2021 |
As of December 31, 2021 |
|||||||
Exercise price |
$ | 0.05 | $ | 0.05 | ||||
Common stock fair value |
$ | 9.83 | $ | 9.83 | ||||
Term (in years) |
10.0 | 9.8 | ||||||
Volatility |
27.56 | % | 27.56 | % | ||||
Risk-free interest rate |
1.53 | % | 1.52 | % | ||||
Expected dividends |
0 | % | 0 | % |
Equipment |
3 years | |
Furniture and fixtures |
3 years | |
Software |
3 years | |
Vehicles |
4 years | |
Leasehold improvements |
shorter of lease term or 5 years | |
Site acquisition costs |
5 years | |
Distribution system |
3 -10 years | |
Asset retirement obligation |
10 years | |
Construction-in-process |
A |
• | Identify the contract with a customer |
• | Identify the performance obligations in the contract |
• | Determine the transaction price |
• | Allocate the transaction price to the performance obligations in the contract |
• | Recognize revenue when or as performance obligations are satisfied |
Unearned Revenue |
||||
December 31, 2020 |
$ | 1,169 | ||
Change |
461 | |||
December 31, 2021 |
$ | 1,630 |
As of |
||||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Gross term loans |
$ | 202,671 | $ | 144,877 | ||||
Convertible notes payable, net of unamortized discount at December 31, 2021 and 2020 of $0 and $2,282, respectively |
— | 29,256 | ||||||
Strategic Partner Arrangement (see Note 12) |
5,227 | 1,722 | ||||||
Capital lease obligations |
2,221 | 1,609 | ||||||
210,119 | 177,464 | |||||||
Less unamortized debt discount on term loans |
(17,019 |
) |
(13,657 |
) | ||||
Less current portion of debt |
(1,504 | ) | (29,875 | ) | ||||
Debt, net of current portion |
$ | 191,596 | $ | 133,932 |
(a) | Automatic conversion of outstanding principal and unpaid accrued interest upon the closing of the next equity financing. The conversion price will be based on the next equity financing per share price with a 20% discount, provided that the conversion price is not less than the Series D preferred stock price ($7.77 |
(b) | Automatic conversion of outstanding principal and unpaid accrued interest upon maturity of the 2020 Notes into shares of Series D preferred stock. The number of Series D preferred stock shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D preferred stock price. |
(c) | Automatic redemption upon the Company closing a corporate transaction, or liquidation event (including an IPO, SPAC transaction or other change in control event). In such scenario, the majority noteholders would elect either (i) the repayment of the outstanding principal and accrued unpaid interest due upon the closing of the corporate transaction or (ii) the conversion of the 2020 Notes into the right to receive a cash payment as though the principal and unpaid accrued interest had converted into conversion shares. The conversion price will be based on the corporate transaction per share price with a 20% discount, provided that the conversion price is not less than the Series D preferred stock price ($7.77 |
(d) | Automatic conversion of outstanding principal and unpaid accrued interest upon the closing of an initial public offering. The number of conversion shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D preferred stock price. |
(e) | Automatic conversion of outstanding principal and unpaid accrued interest upon an event of default under the Credit Agreement. The number of conversion shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D preferred stock price. |
(a) | Automatic conversion of outstanding principal and unpaid accrued interest upon the closing of the next equity financing. The conversion price will be based on the next equity financing per share price with a 20% discount, as long as it is not greater than $8.53 per share. The number of conversion shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the above mentioned conversion price. This feature is effectively made up of two separate components, a share-settled redemption feature when the conversion price is not greater than $8.53 per share, and a traditional conversion option when the conversion price is greater than $8.53 per share. |
(b) | Automatic conversion of outstanding principal and unpaid accrued interest upon maturity of the 2021 Notes into shares of Series D preferred stock. The number of Series D preferred stock shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D preferred stock price. |
(c) | Automatic redemption upon the Company closing a corporate transaction. In such scenario, the majority noteholders would elect either (i) the repayment of the outstanding principal and accrued unpaid interest due upon the closing of the corporate transaction or (ii) the conversion of the 2021 Notes into the right to receive a cash payment as though the principal and unpaid accrued interest had converted into conversion shares. The conversion price will be based on the corporate transaction per share price with a 20% discount, provided it is not greater than $8.53. The number of conversion shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the above mentioned conversion price. This feature is effectively made up of two separate components, a share-settled redemption feature when the conversion price is not greater than $8.53 per share, and a traditional conversion option when the conversion price is greater than $8.53 per share. |
(d) | Automatic conversion of outstanding principal and unpaid accrued interest upon the closing of an initial public offering. The number of conversion shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D preferred stock price. |
(e) | Automatic conversion of outstanding principal and unpaid accrued interest upon an event of default under the Credit Agreement. The number of conversion shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D preferred stock price. |
(f) | In the event of a future non-equity financing prior to the full payment or conversion of the Notes, each lender will have the option to elect for the principal and unpaid accrued interest of each outstanding note to be converted into either (i) the instrument used in the non-equity financing on the same price, or (ii) conversion shares. The number of conversion shares to be issued shall be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the conversion price. |
Years Ended December 31, |
Term loans |
Capital lease obligations |
||||||
2022 |
$ | — | $ | 1,092 | ||||
2023 |
— | 731 | ||||||
2024 |
202,671 | 452 | ||||||
2025 |
— | 146 | ||||||
202,671 | 2,421 | |||||||
Less: imputed interest |
— | (200 | ) | |||||
Total future maturities |
$ | 202,671 | $ | 2,221 | ||||
a) | a merger or consolidation of the Company with or into another entity, unless the shares of stock of the Company continue to represent or are converted into or exchanged for shares of capital stock that represent a majority of voting power of the surviving corporation; or |
b) | the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, of substantially all the assets of the Company. |
Voting common shares |
Non-voting common shares |
|||||||
Conversion of redeemable, convertible preferred stock |
91,628,998 | — | ||||||
Warrants issued and outstanding |
— | 8,221,123 | ||||||
Stock options issued and outstanding |
— | 8,873,981 | ||||||
Authorized for future grant under 2014 Stock Option and Grant Plan |
— | 334,056 | ||||||
|
|
|
|
|||||
91,628,998 | 17,439,160 | |||||||
|
|
|
|
Original issuance date |
Expiration date | Exercise price |
Warrants issued |
Warrants currently exercisable |
||||||||||||
September 2017 |
September 2027 | $ | 0.92 | 92,039 | 92,039 | |||||||||||
February 2019 |
February 2029 | $ | 0.01 | 2,765,887 | 2,765,887 | |||||||||||
December 2019 |
December 2029 | $ | 0.01 | 3,244,510 | 3,244,510 | |||||||||||
October 2021 |
October 2031 | $ | 0.05 | 2,118,687 | 529,672 | |||||||||||
|
|
|
|
|||||||||||||
8,221,123 | 6,632,108 | |||||||||||||||
|
|
|
|
December 31, | ||||
2021 |
2020 | |||
Expected volatility |
27.8% - 28.2% |
24.0% - 28.1% | ||
Expected term (in years) |
5.4 - 6.1 | 5.0 - 6.1 | ||
Risk-free interest rate |
0.8% - 1.1% |
0.4% - 1.7% | ||
Expected dividend yield |
$0.00 | $0.00 |
• | Expected volatility: |
• | Expected term: Share-Based Payment |
• | Risk-free interest rate: |
• | Expected dividend yield: |
Options |
Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
Aggregate Intrinsic Value |
||||||||||||
Outstanding at January 1, 2021 |
8,089,996 | $ | 1.79 | 7.3 | $ | 11,053 | ||||||||||
Expired |
(66,616 | ) | 2.39 | |||||||||||||
Granted |
1,295,362 | 7.23 | ||||||||||||||
Exercised |
(600,943 | ) | 1.25 | |||||||||||||
Cancelled or forfeited |
(660,714 | ) | 3.15 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at December 31, 2021 |
8,057,085 | $ | 2.55 | 6.5 | $ | 58,469 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at January 1, 2021 |
4,614,863 | $ | 1.14 | 6.2 | $ | 9,371 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at December 31, 2021 |
5,262,716 | $ | 1.47 | 5.4 | $ | 44,060 | ||||||||||
|
|
|
|
|
|
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
Distribution system |
$ | 142,202 | $ | 91,719 | ||||
Asset retirement obligation |
2,015 | 1,232 | ||||||
Construction in progress |
28,493 | 12,496 | ||||||
Equipment |
6,051 | 4,814 | ||||||
Vehicles |
3,943 | 2,875 | ||||||
Site acquisition costs |
3,155 | 2,547 | ||||||
Furniture and fixtures |
1,267 | 1,163 | ||||||
Software |
1,452 | 626 | ||||||
Leasehold improvements |
691 | 596 | ||||||
189,269 | 118,068 | |||||||
Less: accumulated depreciation |
(60,250 | ) | (31,410 | ) | ||||
Property and equipment, net |
$ | 129,019 | $ | 86,658 | ||||
Balance, January 1, 2020 |
$ | 703 | ||
New asset retirement obligations |
582 | |||
Accretion expense |
114 | |||
Balance, December 31, 2020 |
1,399 | |||
New asset retirement obligations |
783 | |||
Accretion expense |
205 | |||
Balance, December 31, 2021 |
$ | 2,387 | ||
December 31, |
||||||||
2021 |
2020 |
|||||||
Receivable from 2021 Strategic Partner Arrangement (see Note 12) |
$ | 219 | $ | 259 | ||||
Prepaid inventory |
3,821 | 143 | ||||||
Prepaid software |
797 | 553 | ||||||
Contract Manufacturer |
674 | 565 | ||||||
Prepaid rent |
709 | — | ||||||
Other |
859 | 320 | ||||||
Total |
$ | 7,079 | $ | 1,840 | ||||
December 31, 2021 |
December 31, 2020 |
|||||||
Accrued compensation and benefits |
$ | 4,773 | $ | 3,633 | ||||
Accrued sales and use tax |
5,860 | 3,327 | ||||||
Accrued purchases of property and equipment |
3,339 | 2,257 | ||||||
Accrued transaction costs |
3,693 | — | ||||||
Other |
5,512 | 3,856 | ||||||
Total |
$ | 23,177 | $ | 13,073 |
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Federal and state net operating loss carryforwards |
$ | 134,609 | $ | 86,964 | ||||
Research and development tax credits |
6,531 | 5,269 | ||||||
Debt |
2,884 | — | ||||||
Capitalized research and development costs |
1,588 | 1,911 | ||||||
Payroll tax deferral |
337 | 655 | ||||||
Reserves and accruals |
705 | 354 | ||||||
Other |
104 | 108 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
146,758 | 95,261 | ||||||
Deferred tax liabilities: |
||||||||
Fixed Assets - Depreciation |
(3,743 | ) | (1,815 | ) | ||||
Other |
(224 | ) | (622 | ) | ||||
|
|
|
|
|||||
Total deferred tax liabilities |
(3,967 | ) | (2,437 | ) | ||||
Valuation allowance |
(142,791 | ) | (92,824 | ) | ||||
|
|
|
|
|||||
Net deferred tax assets |
$ | — | $ | — | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Federal statutory rate of 21% |
21.0 | % | 21.0 | % | ||||
State taxes |
9.0 | 6.8 | ||||||
Research & development credits |
0.5 | 1.0 | ||||||
Other |
(0.5 | ) | (1.0 | ) | ||||
Change in valuation allowance |
(30.0 | ) | (27.8 | ) | ||||
|
|
|
|
|||||
Effective tax rate |
0.0 | % | 0.0 | % | ||||
|
|
|
|
2022 |
$ | 12,546 | ||
2023 |
10,619 | |||
2024 |
6,784 | |||
2025 |
4,338 | |||
2026 |
2,574 | |||
Thereafter |
1,521 | |||
|
|
|||
$ | 38,382 | |||
|
|
December 31, |
||||||||
2021 |
2020 |
|||||||
Numerator: |
||||||||
Net loss attributable to common stockholder |
$ | (166,545 | ) | $ | (125,093 | ) | ||
|
|
|
|
|||||
Denominator: | ||||||||
Weighted average shares outstanding, basic and diluted |
36,569,966 | 35,743,961 | ||||||
|
|
|
|
|||||
Basic and diluted earnings per share: | ||||||||
Voting common stock |
$ | (4.55 | ) | $ | (3.50 | ) | ||
|
|
|
|
|||||
Non-voting common stock |
$ | (4.55 | ) | $ | (3.50 | ) | ||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash and cash equivalents |
$ | 29,384 | $ | 25,594 | ||||
Restricted cash |
— | 110 | ||||||
Restricted cash included in restricted cash and other assets |
1,378 | 1,127 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows |
$ | 30,762 | $ | 26,831 | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash paid for interest |
$ | 132 | $ | 136 | ||||
|
|
|
|
|||||
Cash paid for taxes |
$ | — | $ | — | ||||
|
|
|
|
Years Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Purchases of property and equipment included within accounts payable and accrued expenses and other current liabilities |
$ | 10,991 | $ | 8,036 | ||||
|
|
|
|
|||||
Unpaid deferred transaction costs included within accounts payable and accrued expenses |
$ | 4,250 | $ | — | ||||
|
|
|
|
|||||
Property and equipment acquired through capital lease obligations |
$ | 1,399 | $ | 424 | ||||
|
|
|
|
|||||
Asset retirement obligations associated with deployed equipment |
$ | 783 | $ | 582 | ||||
|
|
|
|
|||||
Conversion of convertible notes to Series E Preferred Stock |
$ | 45,584 | $ | — | ||||
|
|
|
|
June 30, 2022 |
December 31, 2021 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 99,682 | $ | 29,384 | ||||
Accounts receivable, net |
439 | 380 | ||||||
Deferred costs |
— | 7,049 | ||||||
Prepaid expenses and other current assets |
10,576 | 7,079 | ||||||
Total current assets |
110,697 | 43,892 | ||||||
Property and equipment, net |
149,485 | 129,019 | ||||||
Intangible assets |
48,463 | 48,463 | ||||||
Restricted cash and other assets |
2,510 | 1,860 | ||||||
Total assets |
$ | 311,155 | $ | 223,234 | ||||
Liabilities, redeemable shares and stockholders’ equity (deficit) |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 6,679 | $ | 6,832 | ||||
Unearned revenue |
2,577 | 1,630 | ||||||
Current portion of debt |
1,861 | 1,504 | ||||||
Accrued expenses and other current liabilities |
23,881 | 23,177 | ||||||
Total current liabilities |
34,998 | 33,143 | ||||||
Debt, net of current portion |
219,669 | 191,596 | ||||||
Earnout liabilities |
9,321 | — | ||||||
Warrant liabilities |
8,468 | 14,773 | ||||||
Asset retirement obligations |
2,903 | 2,387 | ||||||
Other liabilities |
19,084 | 12,412 | ||||||
Total liabilities |
294,443 | 254,311 | ||||||
Commitments and contingencies (Note 12) |
||||||||
Redeemable shares (Note 15) |
10,579 | — | ||||||
Stockholders’ equity (deficit): |
||||||||
Convertible preferred stock (Note 5) |
— | 453,184 | ||||||
Old Starry common stock; $0.001 par value; 0 and 150,024,203 shares authorized and 0 and 37,178,873 issued and outstanding at June 30, 2022 and December 31, 2021, respectively |
— | 4 | ||||||
Class A common stock; $0.0001 par value; 800,000,000 shares authorized; 153,393,876 and 0 |
16 | — | ||||||
Class X common stock; $0.0001 par value; 50,000,000 shares authorized; 9,268,335 and 0 |
1 | — | ||||||
Additional paid-in capital |
597,427 | 17,106 | ||||||
Accumulated deficit |
(591,311 | ) | (501,371 | ) | ||||
Total stockholders’ equity (deficit) |
6,133 | (31,077 | ) | |||||
Total liabilities, redeemable shares and stockholders’ equity (deficit) |
$ | 311,155 | $ | 223,234 | ||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Revenues |
$ | 7,754 | $ | 5,091 | $ | 15,124 | $ | 9,614 | ||||||||
Cost of revenues |
(20,725 | ) | (13,318 | ) | (38,916 | ) | (25,822 | ) | ||||||||
Gross loss |
(12,971 | ) | (8,227 | ) | (23,792 | ) | (16,208 | ) | ||||||||
Operating expenses: |
||||||||||||||||
Selling, general and administrative |
(25,128 | ) | (16,028 | ) | (50,218 | ) | (30,238 | ) | ||||||||
Research and development |
(7,810 | ) | (6,476 | ) | (16,037 | ) | (12,418 | ) | ||||||||
Total operating expenses |
(32,938 | ) | (22,504 | ) | (66,255 | ) | (42,656 | ) | ||||||||
Loss from operations |
(45,909 | ) | (30,731 | ) | (90,047 | ) | (58,864 | ) | ||||||||
Other income (expense): |
||||||||||||||||
Interest expense |
(8,038 | ) | (4,926 | ) | (15,568 | ) | (12,581 | ) | ||||||||
Other income (expense), net |
17,640 | (2,897 | ) | 15,675 | (8,155 | ) | ||||||||||
Total other income (expense) |
9,602 | (7,823 | ) | 107 | (20,736 | ) | ||||||||||
Net loss |
$ | (36,307 | ) | $ | (38,554 | ) | $ | (89,940 | ) | $ | (79,600 | ) | ||||
Net loss per share of common stock, basic and diluted (Note 13) |
$ | (0.22 | ) | $ | (1.06 | ) | $ | (0.88 | ) | $ | (2.19 | ) | ||||
Weighted-average shares outstanding, basic and diluted |
162,423,594 | 36,410,177 | 102,357,494 | 36,325,426 | ||||||||||||
Three Months Ended June 30, 2022 and 2021 |
||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock |
Class A Common Stock |
Class X Common Stock |
Additional Paid-In |
Accumulated |
Stockholders’ |
Temporary Equity |
||||||||||||||||||||||||||||||||||
Shares |
Par Value |
Shares |
Par Value |
Shares |
Par Value |
Capital |
Deficit |
Equity (Deficit) |
Redeemable Shares |
|||||||||||||||||||||||||||||||
Balance at March 31, 2022 |
— |
$ |
— |
152,926,661 |
$ |
16 |
9,268,335 |
$ |
1 |
$ |
596,146 |
$ |
(555,004 |
) |
$ |
41,159 |
$ |
10,579 |
||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— |
— |
467,215 |
— |
— |
— |
289 |
— |
$ |
289 |
— |
|||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
— |
992 |
— |
$ |
992 |
— |
|||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
(36,307 |
) |
$ |
(36,307 |
) |
— |
|||||||||||||||||||||||||||
Balance at June 30, 2022 |
— |
$ |
— |
153,393,876 |
$ |
16 |
9,268,335 |
$ |
1 |
$ |
597,427 |
$ |
(591,311 |
) |
$ |
6,133 |
$ |
10,579 |
||||||||||||||||||||||
Balance at March 31, 2021 |
91,628,997 |
$ |
453,184 |
36,327,947 |
$ |
4 |
— |
$ |
— |
$ |
21,711 |
$ |
(375,872 |
) |
$ |
99,027 |
$ |
— |
||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— |
— |
135,173 |
— |
— |
— |
116 |
— |
$ |
116 |
— |
|||||||||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
— |
— |
358 |
— |
$ |
358 |
— |
|||||||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
— |
(38,554 |
) |
$ |
(38,554 |
) |
— |
|||||||||||||||||||||||||||
Balance at June 30, 2021 |
91,628,997 |
$ |
453,184 |
36,463,120 |
$ |
4 |
— |
$ |
— |
$ |
22,185 |
$ |
(414,426 |
) |
$ |
60,947 |
$ |
— |
||||||||||||||||||||||
Six Months Ended June 30, 2022 and 2021 |
||||||||||||||||||||||||||||||||||||||||
Convertible Preferred Stock |
Class A Common Stock |
Class X Common Stock |
Additional Paid-In |
Accumulated |
Stockholders’ |
Temporary Equity |
||||||||||||||||||||||||||||||||||
Shares |
Par Value |
Shares |
Par Value |
Shares |
Par Value |
Capital |
Deficit |
Equity (Deficit) |
Redeemable Shares |
|||||||||||||||||||||||||||||||
Balance at December 31, 2021 |
497,770,570 | $ | 453,184 | 201,972,619 | $ | 14 | — | $ | — | $ | 17,096 | $ | (501,371 | ) | $ | (31,077 | ) | $ | — | |||||||||||||||||||||
Retroactive application of Business Combination (see Note 1) |
(406,141,573 | ) | — | (164,793,746 | ) | (10 | ) | — | — | 10 | — | — | — | |||||||||||||||||||||||||||
Adjusted balance, beginning of period |
91,628,997 | $ | 453,184 | 37,178,873 | $ | 4 | — | $ | — | $ | 17,106 | $ | (501,371 | ) | $ | (31,077 | ) | $ | — | |||||||||||||||||||||
Conversion of legacy common stock to Class X common stock in connection with the Business Combination |
— | — | (9,268,335 | ) | (1 | ) | 9,268,335 | 1 | — | — | $ | — | — | |||||||||||||||||||||||||||
Issuance of Series Z convertible preferred stock in connection with the Business Combination |
4,133,333 | 31,000 | — | — | — | — | — | — | $ | 31,000 | — | |||||||||||||||||||||||||||||
Conversion of convertible preferred stock into common stock in connection with the Business Combination |
(95,762,330 | ) | (484,184 | ) | 95,762,330 | 10 | — | — | 484,174 | — | $ | — | — | |||||||||||||||||||||||||||
Issuance of common stock upon exercise of warrants in connection with the Business Combination |
— | — | 6,758,512 | 1 | — | — | 12,548 | — | $ | 12,549 | — | |||||||||||||||||||||||||||||
Business Combination transaction, net of transaction costs and assumed liabilities |
— | — | 22,132,385 | 2 | — | — | 110,930 | — | $ | 110,932 | — | |||||||||||||||||||||||||||||
Sponsor Earnout Shares liability (see Note 9) |
— | — | — | — | — | — | (26,095 | ) | — | $ | (26,095 | ) | — | |||||||||||||||||||||||||||
Reclassification of redeemable shares from permanent equity to temporary equity (see Note 15) |
— | — | — | — | — | — | (10,579 | ) | — | $ | (10,579 | ) | 10,579 | |||||||||||||||||||||||||||
Recognition of distribution to non-redeeming shareholders (see Note 5) |
— | — | — | — | — | — | 3,888 | — | $ | 3,888 | — | |||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | 830,111 | — | — | — | 756 | — | $ | 756 | — | |||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | 4,699 | — | $ | 4,699 | — | |||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | (89,940 | ) | $ | (89,940 | ) | — | |||||||||||||||||||||||||||
Balance at June 30, 2022 |
— | $ | — | 153,393,876 | $ | 16 | 9,268,335 | $ | 1 | $ | 597,427 | $ | (591,311 | ) | $ | 6,133 | $ | 10,579 | ||||||||||||||||||||||
Balance at December 31, 2020 |
395,904,883 | $ | 287,750 | 196,415,008 | $ | 9 | — | $ | — | $ | 21,384 | $ | (334,826 | ) | $ | (25,683 | ) | $ | — | |||||||||||||||||||||
Retroactive application of Business Combination (see Note 1) |
(323,027,196 | ) | — | (160,259,173 | ) | (5 | ) | — | — | 5 | — | $ | — | — | ||||||||||||||||||||||||||
Adjusted balance, beginning of period |
72,877,686 | $ | 287,750 | 36,155,835 | $ | 4 | — | $ | — | $ | 21,389 | $ | (334,826 | ) | $ | (25,683 | ) | $ | — | |||||||||||||||||||||
Issuance of common stock upon exercise of stock options |
— | — | 307,285 | — | — | — | 218 | — | $ | 218 | — | |||||||||||||||||||||||||||||
Issuance of Series E convertible preferred stock, net of issuance costs of $150 |
13,148,484 | 119,850 | — | — | — | — | — | — | $ | 119,850 | — | |||||||||||||||||||||||||||||
Conversion of convertible notes payable to Series E convertible preferred stock |
5,602,827 | 45,584 | — | — | — | — | — | — | $ | 45,584 | — | |||||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | 578 | — | $ | 578 | — | |||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | (79,600 | ) | $ | (79,600 | ) | — | |||||||||||||||||||||||||||
Balance at June 30, 2021 |
91,628,997 | $ | 453,184 | 36,463,120 | $ | 4 | — | $ | — | $ | 22,185 | $ | (414,426 | ) | $ | 60,947 | $ | — |
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Operating activities: |
||||||||
Net loss |
$ | (89,940 | ) | $ | (79,600 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization expense |
19,645 | 12,973 | ||||||
Paid-in-kind |
12,070 | 8,369 | ||||||
Amortization of debt discount and deferred charges |
3,402 | 3,150 | ||||||
Conversion of debt discount |
— | 971 | ||||||
Loss on extinguishment of debt |
— | 2,361 | ||||||
Fair value adjustment of derivative liabilities |
(19,559 | ) | 5,796 | |||||
Recognition of distribution to non-redeeming shareholders |
3,888 | — | ||||||
Loss on disposal of property and equipment |
1,434 | 1,223 | ||||||
Share-based compensation |
4,699 | 578 | ||||||
Transaction costs allocated to warrants and earnout liability instruments |
314 | — | ||||||
Accretion of asset retirement obligations |
144 | 89 | ||||||
Provision for doubtful accounts |
24 | 2 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(84 | ) | (106 | ) | ||||
Prepaid expenses and other current assets |
(3,494 | ) | (2,141 | ) | ||||
Deferred cost |
— | (453 | ) | |||||
Other assets |
(649 | ) | (14 | ) | ||||
Accounts payable |
(246 | ) | (770 | ) | ||||
Unearned revenue |
947 | 541 | ||||||
Accrued expenses and other current liabilities |
1,885 | 1,473 | ||||||
Other liabilities |
4 | 2,000 | ||||||
Net cash used in operating activities |
(65,516 | ) | (43,558 | ) | ||||
Investing activities: |
||||||||
Purchases of property and equipment |
(37,584 | ) | (29,985 | ) | ||||
Net cash used in investing activities |
(37,584 | ) | (29,985 | ) | ||||
Financing activities: |
||||||||
Proceeds from Business Combination, net of transaction costs |
160,539 | — | ||||||
Repayment of note assumed in the Business Combination |
(1,200 | ) | — | |||||
Proceeds from the issuance of convertible notes payable and beneficial conversion feature on convertible notes |
— | 11,000 | ||||||
Proceeds from Strategic Partner Arrangement |
3,932 | 1,994 | ||||||
Proceeds from exercise of common stock options |
756 | 218 | ||||||
Proceeds from the issuance of Series E Preferred Stock, net of issuance costs |
— | 119,850 | ||||||
Proceeds from the issuance of term loans, net of issuance costs |
10,000 | — | ||||||
Payments of third-party issuance costs in connection with Term Loans |
(47 | ) | — | |||||
Repayments of capital lease obligations |
(582 | ) | (373 | ) | ||||
Net cash provided by financing activities |
173,398 | 132,689 | ||||||
Net increase (decrease) in cash and cash equivalents and restricted cash: |
70,298 | 59,146 | ||||||
Cash and cash equivalents and restricted cash, beginning of period |
30,762 | 26,831 | ||||||
Cash and cash equivalents and restricted cash, end of period |
$ | 101,060 | $ | 85,977 |
Starry equity holders (1) |
140,062,611 | 86 | % | |||||
FirstMark founder shares (2) (3) |
2,677,500 | 2 | % | |||||
FirstMark public stockholders (3) |
4,921,551 | 3 | % | |||||
PIPE Investors (3) |
14,533,334 | 9 | % | |||||
Starry common stock immediately after the Business Combination |
162,194,996 | 100 | % | |||||
(1) | Excludes 45,918,159 shares of Class A common stock underlying outstanding stock options and restricted stock units. |
(2) | Excludes 4,128,113 Earnout Shares subject to forfeiture if certain performance-based vesting conditions are not met (see Note 9). |
(3) | The FirstMark founder shares, FirstMark public stockholders and PIPE investors are presented combined in the Condensed Consolidated Statements of Stockholders’ Equity (Deficit) on the line item “Business Combination transaction, net of transaction costs and assumed liabilities”. |
Cash - FirstMark trust and cash |
$ | 36,282 | ||
Cash - PIPE investors (including Series Z) |
140,000 | |||
Gross proceeds |
176,282 | |||
Less: transaction costs paid during the period |
(15,743 | ) | ||
Net proceeds from the Business Combination |
160,539 | |||
Less: Series Z Preferred Stock (1) |
(31,000 | ) | ||
Less: warrant liabilities issued |
(15,697 | ) | ||
Less: repayment of note assumed in the Business Combination |
(1,200 | ) | ||
Less: net transaction costs reclassed to equity, including accrued transaction costs at June 30, 2022 |
(1,475 | ) | ||
Less: issuance of non-redemption shares |
(42 | ) | ||
Less: net liabilities assumed from the Business Combination |
(195 | ) | ||
Business Combination, net of transaction costs and assumed liabilities on the Statement of Changes in Stockholders’ Equity (Deficit) |
$ | 110,930 | ||
• | Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. |
• | Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). |
• | Income approach: Techniques to convert future amounts to a single present value amount based upon market expectations (including present value techniques, option pricing and excess earnings models) |
June 30, 2022 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Balance |
|||||||||||||
Liabilities: |
||||||||||||||||
Warrant Liabilities - Public Warrants |
$ | 5,658 | $ | — | $ | — | $ | 5,658 | ||||||||
Warrant Liabilities - Private Warrants |
— | 2,810 | — | 2,810 | ||||||||||||
Other Liabilities - Junior Debt Exchange |
— | — | 5,616 | 5,616 | ||||||||||||
Earnout Liability - Sponsor Earnout Shares |
— | — | 9,321 | 9,321 | ||||||||||||
Total Liabilities: |
$ | 5,658 | $ | 2,810 | $ | 14,937 | $ | 23,405 |
December 31, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Balance |
|||||||||||||
Liabilities: |
||||||||||||||||
Warrant Liabilities - Starry Warrants |
$ | — | $ | — | $ | 14,773 | $ | 14,773 | ||||||||
Total Liabilities: |
$ | — | $ | — | $ | 14,773 | $ | 14,773 |
As of June 30, 2022 |
||||
Common stock fair value |
$ | 4.12 | ||
Exercise price |
$ | 8.75 | ||
Term (in years) |
1.65 | |||
Volatility |
60.00 | % | ||
Risk-free interest rate |
2.88 | % | ||
Expected dividends |
0 | % |
As of June 30, 2022 |
||||
Common stock fair value |
$ | 4.12 | ||
Term (in years) |
4.75 | |||
Volatility |
60.00 | % | ||
Risk-free interest rate |
2.99 | % | ||
Expected dividends |
0 | % |
As of March 29, 2022 |
As of December 31, 2021 |
|||||||
Exercise price |
$ | 0.01 | $ | 0.01 | ||||
Common stock fair value (pre-exchange) |
$ | 1.77 | $ | 1.81 | ||||
Term (in years) |
9.5 | 9.8 | ||||||
Volatility |
27.57 | % | 27.56 | % | ||||
Risk-free interest rate |
2.41 | % | 1.52 | % | ||||
Expected dividends |
0 | % | 0 | % |
Unearned Revenue |
||||
Balance, December 31, 2021 |
$ | 1,630 | ||
Change, net |
947 | |||
Balance, June 30, 2022 |
$ | 2,577 |
As of |
||||||||
June 30, 2022 |
December 31, 2021 |
|||||||
Gross term loans |
$ | 224,545 | $ | 202,671 | ||||
Strategic Partner Arrangement (see Note 12) |
9,355 | 5,227 | ||||||
Capital lease obligations |
3,071 | 2,221 | ||||||
236,971 | 210,119 | |||||||
Less unamortized debt discount on term loans |
(15,441 | ) | (17,019 | ) | ||||
Less current portion of debt |
(1,861 | ) | (1,504 | ) | ||||
Debt, net of current portion |
$ | 219,669 | $ | 191,596 |
(a) | Automatic conversion of outstanding principal and unpaid accrued interest upon the closing of the next equity financing. The conversion price was based on the next equity financing per share price with a 20 % discount, as long as it was not greater than $1.57 per share. The number of conversion shares to be issued was equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the above-mentioned conversion price. This feature was effectively made up of two separate components, a share-settled redemption feature when the conversion price is not greater than $1.57 per share, and a traditional conversion option when the conversion price is greater than $1.57 per share. |
(b) | Automatic conversion of outstanding principal and unpaid accrued interest upon maturity of the 2021 Notes into shares of Series D preferred stock. The number of Series D Preferred Stock shares to be issued was equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D Preferred Stock price. |
(c) | Automatic redemption upon the Company closing a corporate transaction. In such scenario, the majority noteholders would elect either (i) the repayment of the outstanding principal and accrued unpaid interest due upon the closing of the corporate transaction or (ii) the conversion of the 2021 Notes into the right to receive a cash payment as though the principal and unpaid accrued interest had converted into conversion shares. The conversion price was to be based on the corporate transaction per share price with a 20 % discount, provided it was not greater than $1.57 . The number of conversion shares to be issued was to be equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the above-mentioned conversion price. This feature was effectively made up of two separate components, a share-settled redemption feature when the conversion price is not greater than $1.57 per share, and a traditional conversion option when the conversion price is greater than $1.57 per share. |
(d) | Automatic conversion of outstanding principal and unpaid accrued interest upon the closing of an initial public offering. The number of conversion shares to be issued was equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D Preferred Stock price. |
(e) | Automatic conversion of outstanding principal and unpaid accrued interest upon an event of default under the Starry Credit Agreement. The number of conversion shares to be issued was equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the Series D Preferred Stock price. |
(f) | In the event of a future non-equity financing prior to the full payment or conversion of the Notes, each lender had the option to elect for the principal and unpaid accrued interest of each outstanding note to be converted into either (i) the instrument used in the non-equity financing on the same price, or (ii) conversion shares. The number of conversion shares to be issued was equal to the quotient obtained by dividing (i) the outstanding principal and unpaid accrued interest due by (ii) the conversion price. |
Convertible Preferred Stock |
Par Value |
Authorized (1) |
Issued and Outstanding (1) |
Carrying Value |
||||||||||||
Series Seed |
$ | 0.001 | 9,761,747 | 9,761,745 | $ | 6,990 | ||||||||||
Series A |
0.001 | 16,852,283 | 16,852,283 | 25,946 | ||||||||||||
Series B |
0.001 | 10,207,696 | 10,207,696 | 29,910 | ||||||||||||
Series C |
0.001 | 19,965,160 | 19,965,160 | 99,989 | ||||||||||||
Series D |
0.001 | 16,090,802 | 16,090,802 | 124,915 | ||||||||||||
Series E |
0.001 | 19,299,164 | 18,751,311 | 165,434 | ||||||||||||
Series Z |
0.001 | 5,000,000 | 4,133,333 | 31,000 | ||||||||||||
97,176,852 |
95,762,330 |
$ |
484,184 |
|||||||||||||
(1) | Shares of Old Starry Preferred Stock authorized, issued and outstanding have been adjusted to reflect the exchange of Old Starry common stock for Class A common stock at an exchange of 0.1841 as a result of the Business Combination (see Note 1). |
• | Convert into one share of Class A common stock at the option of the holder. |
• | Automatically convert into one share of Class A common stock upon a transfer of such share, other than to a Qualified Stockholder (as defined in the Amended and Restated Certificate of Incorporation of Starry Group, as filed as an exhibit to the Annual Report on March 31, 2022). |
• | Automatically convert into one share of Class A common stock upon the earlier of (such date, the “Sunset Date”): (a) the date that is nine months following March 29, 2022 on which the holder (1) is no longer providing services as a member of the senior leadership team, officer or director and (2) has not provided any such services for the duration of such nine-month period; and (b) the first date after March 29, 2022 as of which the holder has transferred, in the aggregate, more than 75% of the shares of Class X common stock that were held by the holder immediately following the consummation of the Business Combination. Following such conversion, the reissuance of shares of Class X common stock will be prohibited. |
June 30, 2022 |
December 31, 2021 |
|||||||
Distribution system |
$ | 170,406 | $ | 145,357 | ||||
Asset retirement obligation |
2,387 | 2,015 | ||||||
Construction in progress |
38,847 | 28,493 | ||||||
Equipment |
7,722 | 6,051 | ||||||
Vehicles |
4,207 | 3,943 | ||||||
Furniture and fixtures |
1,335 | 1,267 | ||||||
Software |
3,290 | 1,452 | ||||||
Leasehold improvements |
870 | 691 | ||||||
229,064 | 189,269 | |||||||
Less: accumulated depreciation |
(79,579 | ) | (60,250 | ) | ||||
Property and equipment, net |
$ | 149,485 | $ | 129,019 | ||||
Balance, January 1, 2022 |
$ | 2,387 | ||
New asset retirement obligations |
372 | |||
Accretion expense |
144 | |||
Balance, June 30, 2022 |
$ | 2,903 | ||
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the last reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
• | in whole and not in part; |
• | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table in the Registration Statement, based on the redemption date and the “fair market value” of shares of Class A common stock, except as otherwise described below; |
• | if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments” in the Registration Statement); and |
• | if the Reference Value is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Warrants — Public Stockholders’ Warrants — Anti-dilution Adjustments” in the Registration Statement), the private placement warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above. |
• | the adjustment to the warrant price of the Public Warrants from $11.50 per 1.2415 shares to $9.13 per 1.2415 shares of Class A common stock; |
• | the adjustment of the $18.00 per share redemption trigger price to $14.29 per share of Class A common stock; and |
• | the adjustment of the $10.00 per share redemption trigger price to $7.94 per share of Class A common stock (representing the Market Value). |
June 30, 2022 |
December 31, 2021 |
|||||||
Accrued compensation and benefits |
$ | 5,004 | $ | 4,773 | ||||
Accrued sales and use tax |
7,101 | 5,860 | ||||||
Accrued purchases of property and equipment |
4,304 | 3,339 | ||||||
Accrued transaction costs |
813 | 3,693 | ||||||
Other |
6,659 | 5,512 | ||||||
Total |
$ | 23,881 | $ | 23,177 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Numerator: |
||||||||||||||||
Net loss |
$ | (36,307 | ) | $ | (38,554 | ) | $ | (89,940 | ) | $ | (79,600 | ) | ||||
Denominator: |
||||||||||||||||
Weighted average shares outstanding, basic and diluted |
162,423,594 | 36,410,177 | 102,357,494 | 36,325,426 | ||||||||||||
Basic and diluted earnings per share: |
||||||||||||||||
Class A common stock |
$ | (0.22 | ) | $ | (1.06 | ) | $ | (0.88 | ) | $ | (2.19 | ) | ||||
Class X common stock |
$ | (0.22 | ) | $ | (1.06 | ) | $ | (0.88 | ) | $ | (2.19 | ) | ||||
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Cash and cash equivalents |
$ | 99,682 | $ | 84,820 | ||||
Restricted cash |
— | 30 | ||||||
Restricted cash included in restricted cash and other assets |
1,378 | 1,127 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows |
$ | 101,060 | $ | 85,977 | ||||
|
|
|
|
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Cash paid for interest |
$ | 121 | $ | 67 | ||||
|
|
|
|
|||||
Cash paid for taxes |
$ | — | $ | — | ||||
|
|
|
|
Six Months Ended June 30, |
||||||||
2022 |
2021 |
|||||||
Purchases of property and equipment included within accounts payable and accrued expenses and other current liabilities |
$ | 13,147 | $ | 9,855 | ||||
|
|
|
|
|||||
Unpaid deferred transaction costs included within accounts payable and accrued expenses |
$ | 813 | $ | — | ||||
|
|
|
|
|||||
Property and equipment acquired through capital lease obligations |
$ | 1,432 | $ | 386 | ||||
|
|
|
|
|||||
Asset retirement obligations associated with deployed equipment |
$ | 372 | $ | 370 | ||||
|
|
|
|
|||||
Conversion of convertible notes to Series E Preferred Stock |
$ | — | $ | 45,584 | ||||
|
|
|
|
SEC registration fee |
$ | 7,770.12 | ||
Accounting fees and expenses |
* | |||
Legal fees and expenses |
* | |||
Financial printing and miscellaneous expenses |
* | |||
Total |
$ | * |
* | These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be determined at this time. |
• | On March 29, 2022, in conjunction with the Business Combination, the Company consummated the sale of 14,533,334 shares (the “PIPE Shares”) of Class A Common Stock to certain accredited investors pursuant to subscription agreements entered into on October 6, 2021 in conjunction with the Merger Agreement. The PIPE Shares were sold at a price of $7.50 per share and an aggregate purchase price of $109.0 million. |
• | On March 29, 2022, in conjunction with the Business Combination, the Company consummated the sale of 4,133,333 (the “Series Z Shares”) of Series Z Preferred Stock to certain accredited investors affiliated with the Sponsor, pursuant to a subscription agreement entered into on October 6, 2021 in conjunction with the Merger Agreement and an additional subscription agreement entered into on March 25, 2022. The Series Z Shares were sold at a price of $7.50 per share and an aggregate purchase price of $31.0 million. The Series Z Shares were sold following the SPAC Merger and immediately prior to the Acquisition Merger. Upon the Acquisition Merger, each share of the then-outstanding Series Z Preferred Stock converted automatically into the right to receive shares of our Class A Common Stock on a one-for-one |
• | Subsequent to the close of the Business Combination, the Company consummated the issuance of 422,108 shares of Class A Common Stock to certain accredited investors affiliated with ArrowMark in connection with non-redemption agreements entered into on March 9, 2022, whereby such investors agreed not to redeem a certain number of shares of FirstMark Class A Common Stock beneficially owned by such entities. |
(a) | Exhibits. See the exhibit index immediately preceding the signature pages hereto, which is incorporated by reference as if fully set forth herein. |
(b) | Financial Statement Schedules. None. |
(a) | The undersigned registrant hereby undertakes: |
(1) | to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement (notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement); and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
(2) | that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; |
(3) | to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; |
(4) | that, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use; and |
(5) | that, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of an undersigned registrant; and (iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
† | Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. |
+ | Certain portions of this exhibit (indicated by “[***]”) have been omitted pursuant to Regulation S-K, Item (601)(b)(10). |
STARRY GROUP HOLDINGS, INC. | ||
By: | /s/ Chaitanya Kanojia | |
Name: | Chaitanya Kanojia | |
Title: | Chief Executive Officer |
Signature |
Title |
Date | ||
/s/ Chaitanya Kanojia |
Chief Executive Officer and Director | August 24, 2022 | ||
Chaitanya Kanojia | (principal executive officer) | |||
/s/ Komal Misra |
Chief Financial Officer | August 24, 2022 | ||
Komal Misra | (principal financial officer and | |||
principal accounting officer) | ||||
/s/ James Chiddix |
Director | August 24, 2022 | ||
James Chiddix | ||||
/s/ Amish Jani |
Director | August 24, 2022 | ||
Amish Jani | ||||
/s/ Elizabeth A. Graham |
Director | August 24, 2022 | ||
Elizabeth A. Graham | ||||
/s/ Robert L. Nabors II |
Director | August 24, 2022 | ||
Robert L. Nabors II |
Exhibit 5.1
August 24, 2022
Starry Group Holdings, Inc.
38 Chauncy Street, Suite 200
Boston, Massachusetts 02111
Re: Starry Group Holdings, Inc. Registration Statement on Form S-1
To the addressee set forth above:
We have acted as special counsel to Starry Group Holdings, Inc., a Delaware corporation (the Company), in connection with the filing on the date hereof with the Securities and Exchange Commission (the Commission) of a registration statement on Form S-1 (as amended, the Registration Statement) under the Securities Act of 1933, as amended (the Act), relating to the registration of the offer and sale from time to time, in each case, by the selling stockholder named in the Registration Statement (the Stockholder) of (i) 396,826 outstanding shares (the Commitment Shares) of Class A common stock, par value $0.0001 per share, of the Company (the Common Stock) that were issued to the Stockholder by the Company as consideration for the Stockholders execution and delivery of that certain common stock purchase agreement, dated as of August 8, 2022, by and between the Company and the Stockholder (the Purchase Agreement) and (ii) up to 32,603,174 shares of Common Stock that the Company may elect, in its sole discretion, to issue and sell to the Stockholder, from time to time from and after the Commencement Date as defined in the Purchase Agreement (the Reserve Shares and, together with the Commitment Shares, the Shares). This opinion is being furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Act, and no opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement or related prospectus or prospectus supplement (collectively, the Prospectus), other than as expressly stated herein with respect to the offer and sale of the Shares.
As such counsel, we have examined such matters of fact and questions of law as we have considered appropriate for purposes of this letter. With your consent, we have relied upon certificates and other assurances of officers of the Company and others as to factual matters without having independently verified such factual matters. We are opining herein as to the General Corporation Law of the State of Delaware (the DGCL), and we express no opinion with respect to any other laws.
Subject to the foregoing and the other matters set forth herein, it is our opinion that, as of the date hereof:
1. | The Commitment Shares have been duly authorized by all necessary corporate action of the Company and are validly issued, fully paid and nonassessable. |
August 24, 2022
Page 2
2. | When the Reserve Shares shall have been duly registered on the books of the transfer agent and registrar therefor in the name or on behalf of the Stockholder, and have been issued by the Company against payment therefor (not less than par value) in the circumstances contemplated by the Registration Statement and the Purchase Agreement, the issuance and sale of the Reserve Shares will have been duly authorized by all necessary corporate action of the Company, and the Reserve Shares will be validly issued, fully paid and nonassessable. In rendering the foregoing opinion, we have assumed that certain terms of the Reserve Shares to be issued by the Company from time to time will be authorized and approved by the Companys board of directors (the Board) or one or more committees thereof established by the Board or other person or body designated by the Board having the authority to issue and sell Reserve Shares pursuant to the Purchase Agreement in accordance with the DGCL, the amended and restated certificate of incorporation and the bylaws of the Company and certain resolutions of the Board and one or more committees thereof. |
In rendering the foregoing opinions, we have assumed that (i) the Company complied or will comply with all applicable notice requirements regarding uncertificated shares provided in the DGCL and (ii) upon the issuance of any of the Reserve Shares, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under its amended and restated certificate of incorporation.
This opinion is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Act. We consent to your filing this opinion as an exhibit to the Registration Statement and to the reference to our firm in the Prospectus under the heading Legal Matters. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.
Sincerely,
|
/s/ Latham & Watkins LLP |
Exhibit 21.1
List of Subsidiaries of Starry Group Holdings, Inc.
Following the Business Combination
Name of Subsidiary |
Jurisdiction of Organization | |
Starry, Inc. | Delaware | |
Connect Everyone LLC | Delaware | |
Starry Foreign Holdings Inc. | Delaware | |
Starry Installation Corp. | Delaware | |
Starry (MA), Inc. | Massachusetts | |
Starry Spectrum LLC | Delaware | |
Starry Spectrum Holdings LLC | Delaware | |
Testco LLC | Delaware | |
Vibrant Composites, Inc. | Delaware | |
Widmo Holdings LLC | Delaware | |
Starry Brasil Holding Ltda. | Brazil | |
Starry Brasil Provedor de Acesso a Internet Ltda | Brazil | |
Starry PR Inc. | Delaware |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement on Form S-1 of our report dated March 31, 2022, (June 3, 2022, as to the effects of the retrospective adjustment described in Note 1) relating to the financial statements of Starry Group Holdings, Inc for the year ended December 31, 2021. We also consent to the reference to us under the heading Experts in such Registration Statement.
/s/ Deloitte & Touche LLP |
Boston, Massachusetts |
August 24, 2022 |
Exhibit 107
Calculation of Filing Fee Table
Form S-1
(Form Type)
Starry Group Holdings, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1Newly Registered Securities
Security Type |
Security Class Title | Fee Calculation |
Amount Registered(1) |
Proposed Maximum Offering Price Per Share(2) |
Maximum Aggregate Offering |
Fee Rate | Amount of Registration Fee |
|||||||||||||||
Equity | Class A common stock, $0.0001 par value per share |
Rule 457(c) | 33,000,000 | $2.54 | $83,820,000.00 | $0.0000927 | $7,770.12 | |||||||||||||||
Total Offering Amounts |
$ | 83,820,000.00 | $ | 7,770.12 | ||||||||||||||||||
Total Fees Previously Paid |
$ | | ||||||||||||||||||||
Total Fee Offsets |
$ | | ||||||||||||||||||||
Net Fee Due |
$ | 7,770.12 |
(1) | Includes 396,826 shares of Class A common stock, par value $0.0001 per share (the Class A Common Stock) of Starry Group Holdings, Inc. previously issued by the Company to the selling stockholder named herein (the Stockholder) as payment of a commitment fee and 32,603,174 shares of Class A Common Stock that are available to be issued and sold by the Company to the Stockholder from time to time at the Companys election pursuant to a common stock purchase agreement, dated as of August 8, 2022, between the Company and the Stockholder, subject to satisfaction of the conditions set forth therein. Pursuant to Rule 416(a) promulgated under the U.S. Securities Act of 1933, as amended (the Securities Act), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from stock splits, stock dividends, or similar transactions. |
(2) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act. The proposed maximum offering price per security and proposed maximum aggregate offering price are based on the average of the high and low prices of the Class A Common Stock on The New York Stock Exchange on August 23, 2022 (such date being within five business days of the date that this registration statement was filed with the U.S. Securities and Exchange Commission). |