Item 8.01. Other Events
Supplement to Proxy Statement
As previously disclosed, on February 2, 2021, Holicity Inc., a Delaware
corporation ("Holicity" or the "Company"), entered into a business combination
agreement by and among Holicity, Holicity Merger Sub Inc., a wholly-owned
subsidiary of Holicity ("Merger Sub"), and Astra Space, Inc. ("Astra") (as it
may be amended and/or restated from time to time, the "Business Combination
Agreement"). The business combination was unanimously approved by Holicity's
board of directors (the "Board") on January 29, 2021. If the Business
Combination Agreement is approved by Holicity's and Astra's stockholders, and
the transactions contemplated by the Business Combination Agreement are
consummated, Merger Sub will merge with and into Astra with Astra surviving the
merger as a wholly-owned subsidiary of Holicity (the "Business Combination"). In
addition, in connection with the consummation of the Business Combination (the
"Closing"), Holicity will be renamed "Astra Space, Inc." and is referred to
herein as "New Astra" as of the time following such change of name.
On May 3, 2021, Holicity initially publicly filed a registration statement on
Form S-4 (File No. 333- 255703) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") in connection with the Business
Combination. On June 7, 2021, Holicity filed with the SEC its proxy
statement/prospectus pursuant to Rule 424(b)(3) under the Securities Act of
1933, as amended (the "Securities Act"), relating to the special meeting of
stockholders of Holicity scheduled to be held at 8:00 a.m., Eastern time, June
30, 2021 (the "Proxy Statement") to, among other things, vote on a proposal to
approve and adopt the Business Combination Agreement.
This is a supplement to the Proxy Statement filed by Holicity with the SEC and
mailed to Company stockholders in connection with the solicitation of proxies
for use at the special meeting of stockholders of the Company. The Proxy
Statement is amended and supplemented by the information set forth in this
Current Report on Form 8-K, which should be read as part of, and in conjunction
with, the information contained in the Proxy Statement. To the extent that
information set forth below differs from information contained in the Proxy
Statement, the information set forth below shall supersede such information
contained in the Proxy Statement. Except as otherwise set forth below, the
information set forth in the Proxy Statement remains unchanged, and capitalized
terms used in this Current Report on Form 8-K but not otherwise defined herein
have the meanings ascribed to those terms in the Proxy Statement.
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Since the initial filing of the Registration Statement, purported stockholders
of Holicity have filed three complaints in connection with the Business
Combination (collectively, the "Shareholder Litigation"). On May 21, 2021, a
lawsuit captioned Phillip Smith v. Holicity Inc., et al., Index No. 653445/2021,
was filed in the Supreme Court of the State of New York, County of New York,
against the Company and certain of its officers and directors asserting claims
for breach of fiduciary duty against the defendant directors and for aiding and
abetting such breach against the Company. The complaint alleges, among other
things, that (i) the Registration Statement misrepresented or omitted certain
material information about the Business Combination and (ii) the merger
consideration for the Business Combination is inadequate. On June 14, 2021, a
lawsuit captioned Timothy Cahill v. Holicity Inc., et al., No. 1:21-cv-05269,
was filed in the United States District Court for the Southern District of New
York ("SDNY") against the Company and certain of its officers and directors
asserting claims (i) under Sections 14(a) and 20(a) of the Securities Exchange
Act of 1934 (the "Exchange Act") and (ii) for breach of fiduciary duty. The
complaint alleges, among other things, that the Proxy Statement misrepresented
or omitted certain material information about the Business Combination. On June
21, 2021, a lawsuit captioned Anthony Morgan v. Holicity Inc., et al., No.
1:21-cv-05451, was filed in the SDNY against the Company and certain of its
officers and directors under Sections 14(a) and 20(a) of the Exchange Act,
alleging that the Registration Statement misrepresented or omitted certain
material information about the Business Combination. The plaintiffs in the
Shareholder Litigation seek injunctive relief and damages, as well as fees and
costs.
While the Company believes that no supplemental disclosure is required under
applicable law and that the claims asserted in the Shareholder Litigation are
without merit, in order to avoid the risk of the Shareholder Litigation delaying
or adversely affecting the Business Combination and to minimize the costs, risks
and uncertainties inherent in litigation, and without admitting any liability or
wrongdoing, the Company has determined to voluntarily supplement the
Registration and Proxy Statements as provided below in order to moot the claims.
In exchange, the plaintiffs in the Shareholder Litigation have agreed to
voluntarily dismiss their respective complaints.
Nothing in this Current Report on Form 8-K shall be deemed an admission of the
legal necessity or materiality under applicable laws of any of the disclosures
set forth herein. To the contrary, the Company specifically denies all
allegations in the Complaints and Demands that any additional disclosure was or
is required.
This Current Report on Form 8-K and the disclosure provided herein does not
affect the Business Combination or the timing of the special meeting of the
Company's stockholders scheduled for June 30, 2021 at 8:00 a.m. Eastern time as
described in the Proxy Statement. The Company's board of directors continues to
recommend that Company stockholders vote "FOR" the proposal to approve the
Business Combination Agreement and "FOR" the other proposals being considered at
the special meeting.
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SUPPLEMENT TO THE PROXY STATEMENT
This supplemental information should be read in conjunction with the Proxy
Statement, which should be read in its entirety. Defined terms used but not
defined below have the meanings set forth in the Proxy Statement. All page
references in the information below are to pages in the Proxy Statement.
Paragraph references used herein refer to the proxy statement before any
additions or deletions resulting from the supplemental disclosures. Underlined
text shows text being added to a referenced disclosure in the proxy statement
and stricken text shows text being removed from a referenced disclosure in the
proxy statement. The information contained herein speaks only as of June [_],
2021 unless the information indicates that another date applies.
The section of the Proxy Statement entitled "THE BUSINESS COMBINATION PROPOSAL -
Background of the Business Combination" is hereby amended and supplemented as
follows:
The disclosure in the ninth full paragraph on page 76 of the Proxy Statement is
amended and supplemented to read in its entirety as follows:
After the Initial Public Offering, our officers and directors commenced an
active search for prospective businesses or assets to acquire in our initial
business combination. Representatives of Holicity were contacted by, and
representatives of Holicity contacted, numerous individuals, financial advisors
and other entities who offered to present ideas for business combination
opportunities. Our officers and directors and their affiliates also brought to
our attention target business candidates. Of the potential targets with which
Holicity engaged in preliminary discussions, 24 executed non-disclosure
agreements with Holicity in order to provide access to confidential information,
none of which contained standstill provisions.
The section of the Proxy Statement entitled "THE BUSINESS COMBINATION PROPOSAL -
Holicity's Board of Directors' Reasons for the Approval of the Business
Combination" is hereby amended and supplemented as follows:
The disclosure in the first full paragraph on page 83 of the Proxy Statement is
amended and supplemented to read in its entirety as follows:
"Deutsche Bank conducted an enterprise valuation analysis by reviewing a variety
of inputs, including estimated enterprise values of comparable publicly traded
peer companies, Astra's projected financial models and valuation methodologies
of comparable SPAC business combinations. The public trading market valuation of
comparable Satellite Operators (consisting of Iridium Communications (NASDAQ:
IRDM), Orbcomm Inc. (NASDAQ: ORBC), and Viasat Inc. (NASDAQ: VSAT),
collectively, the "Satellite Operators") have estimated 2021 enterprise value /
2021E revenue multiples ranging from 1.3x to 11.4x (and a median of 2.7x) and
estimated enterprise value / 2021E EBITDA multiples ranging from 6.1x to 18.6x
(and a median of 11.4x), in each case based on publicly available market data as
of December 30, 2020. The public trading market valuation of comparable
Aerospace and Defense companies (consisting of Maxar Technologies (NYSE: MAXR),
L3Harris Technologies (NYSE: LHX), Boeing Co. (NYSE: BA), Northrop Grumman
Corporation (NYSE: NOC), Lockheed Martin Corporation (NYSE: LMT), Airbus SE
(EPA: AIR), and Aerojet Rocketdyne (formerly NYSE: AJRD), collectively, the
"Aerospace and Defense Companies") have estimated enterprise value / 2021E
revenue multiples ranging from 1.3x to 2.6x (and a median of 1.6x) and estimated
enterprise value / 2021EEBITDA multiples ranging from 9.7x to 26.2x (and a
median of 11.1x), in each case based on publicly available market data as of
December 30, 2020; provided that the metrics for Aerojet Rocketdyne represent
market data as of December 18, 2020 given that Lockheed Martin announced the
acquisition of Aerojet Rocketdyne on December 20, 2020. The public trading
market valuation of comparable category-leading de-SPAC companies (consisting of
QuantumScape Corp. (NYSE: QS), Luminar Technologies (NASDAQ: LAZR), ChargePoint
Holdings (NYSE: CHPT), and DraftKings Inc. (NASDAQ: DKNG), collectively, the
"category-leading de-SPAC companies") imply estimated 2025 enterprise value/
2025E revenue multiples ranging from 7.4x to 15.9x (and a median of 10.3x) and
estimated 2025 enterprise value/ 2025E EBITDA multiples ranging from 48.6x to
66.9x (and a median of 49.9x), in each case based on publicly available market
data as of December 30, 2020 and applying the trading price of $41.18 of
Switchback Energy Acquisition Corporation for ChargePoint, being the
counterparty to its previously announced business combination, provided that the
metrics for QuantumScape Corp. represent 2027E, when its operations are
projected to reach scale. The valuation analysis used 2025E financial
projections in light of Astra's anticipated growth trajectory and confidence in
its ability to reach a sustainable adjusted EBITDA margin of approximately 50%,
and applied a range of 10.0x - 12.0x 2025E EBITDA multiples derived from a
median of Astra's expected long-term peer group to generate a range of implied
future enterprise value of the combined company. The range of the implied future
enterprise value was then discounted back at a 20% annual discount rate to
arrive at a range of implied current enterprise value of $3.3 billion to $4.0
billion and the deal was finally priced at a further discount of 42% for a pro
forma enterprise value of $2.123 billion. See the Investor Presentation included
as Exhibit 99.2 to Form 8-K (File No. 001-39426), filed with the SEC on February
2, 2021, for more information on the valuation analysis reviewed by the Holicity
Board of Directors."
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The section of the Proxy Statement entitled "BUSINESS COMBINATION PROPOSAL - The
Private Placement" is hereby amended and supplemented as follows:
The disclosure in the third full paragraph on page 76 of the Proxy Statement is
amended and supplemented to read in its entirety as follows:
In connection with the Private Placement, Holicity engaged BofA Securities, Inc.
("BofA Securities") and PJT Partners LP, a global advisory-based investment bank
("PJT"), as co-placement agents. In connection with performing services as
co-placement agents, BofA Securities and PJT will receive fees and expense
reimbursements customary for a PIPE transaction (subject to the terms and
conditions of their engagement letters with Holicity). See "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
HOLICITY - Contractual Obligations" for more information. PJT previously had
been hired to advise Astra in connection with the proposed business combination,
and will receive customary compensation in connection therewith. Except in
respect of the Private Placement, PJT did not provide any advice to Holicity,
including, but not limited to, regarding the valuation of Astra or the terms of
the business combination with Astra. Holicity and Astra each signed agreements
with PJT acknowledging PJT's role as both financial advisor to Astra in
connection with the proposed business combination and as co-placement agent to
Holicity in connection with the Private Placement and waived any purported
conflicts in connection with such dual roles. In addition, BofA Securities, PJT
and their respective affiliates may provide investment banking and other
financial services to Holicity, Astra and their respective affiliates in the
future, for which they would expect to receive customary compensation.
The section of the Proxy Statement entitled "BUSINESS COMBINATION PROPOSAL -
Background of the Business Combination" is hereby amended and supplemented as
follows:
The disclosure in the eighth full paragraph on page 77 of the Proxy Statement is
amended and supplemented to read in its entirety as follows:
On the same day, Holicity engaged Deutsche Bank Securities Inc. ("Deutsche
Bank") to provide financial advice on the potential transaction and the industry
generally, assist with Holicity's preparation of a financial model of Astra's
business (the "financial model") and help negotiate the transaction. Deutsche
Bank was also the lead underwriter for Holicity's Initial Public Offering. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF HOLICITY - Contractual Obligations" for more information.
The section of the Proxy Statement entitled "BUSINESS COMBINATION PROPOSAL -
Background of the Business Combination" is hereby amended and supplemented as
follows:
The disclosure in the sixth full paragraph on page 78 of the Proxy Statement is
amended and supplemented to read in its entirety as follows:
On December 11, 2020, Holicity management engaged Deutsche Bank and BofA
Securities to advise on a potential business combination with Astra and
separately engaged BofA Securities to be lead placement agent to assist Holicity
in its solicitation of potential PIPE Investors). See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HOLICITY -
Contractual Obligations" for more information.
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The section of the Proxy Statement entitled "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HOLICITY -
Contractual Obligations" is hereby amended and supplemented as follows:
The disclosure in the fourth full paragraph on page 155 of the Proxy Statement
is amended and supplemented to read in its entirety as follows:
We do not have any long-term debt, capital lease obligations, operating lease
obligations or long-term liabilities, other than an agreement to pay our Sponsor
a monthly fee of $10,000 for office space, administrative and support services.
We began incurring these fees on August 4, 2020 and will continue to incur these
fees monthly until the earlier of the completion of the Business Combination or
our liquidation. BofA Securities is entitled to: (i) $1.35 million in deferred
underwriting compensation as compensation for its acting as an underwriter in
the Initial Public Offering, after taking into account a portion of its
respective deferred underwriting compensation applied towards financial advisory
fees; (ii) $1.98 million as a placement agent's fee in connection with the
Private Placement; and (iii) $2.75 million for its role as financial advisor, in
each case that will only accrue if a business combination is consummated.
Deutsche Bank is entitled to: (i) $3.15 million in deferred underwriting
compensation as compensation for its acting as an underwriter in the Initial
Public Offering, after taking into account a portion of its respective deferred
underwriting compensation applied towards financial advisory fees; and (ii)
$3.25 million for its role as financial advisor, in each case that will only
accrue if a business combination is consummated.
The disclosure in the seventh full paragraph on page 155 of the Proxy Statement
is amended and supplemented to read in its entirety as follows:
The underwriters were paid a cash underwriting discount of $0.20 per unit, or
$6.0 million in the aggregate, upon the closing of the Initial Public Offering
and the partial exercise of the over-allotment option. From such underwriting
discount, BofA Securities received fees of $1.8 million and Deutsche Bank
received fees of $4.2 million. In addition, $0.35 per unit, or approximately
$10.5 million in the aggregate, will be payable to the underwriters for deferred
underwriting commissions. The deferred fee will become payable to the
underwriters from the amounts held in the Trust Account solely in the event that
we complete a Business Combination, subject to the terms of the underwriting
agreement.
Important Information About the Business Combination and Where to Find It
In connection with the proposed Business Combination, the Company initially
publicly filed with the SEC the Registration Statement, which includes a proxy
statement/prospectus, and certain other related documents, which will be both
the proxy statement to be distributed to holders of shares of the Company's
common stock in connection with the Company's solicitation of proxies for the
vote by the Company's stockholders with respect to the Business Combination and
other matters as described in the Registration Statement, as well as the
prospectus relating to the offer and sale of the securities of the Company to be
issued in the Business Combination. The registration statement became effective
on June 4, 2021. The Company's stockholders and other interested persons are
advised to read the proxy statement/prospectus included in the Registration
Statement and the amendments thereto, as these materials will contain important
information about the parties to the Business Combination Agreement, the Company
and the Business Combination. The definitive proxy statement/prospectus is being
mailed to stockholders of the Company as of a record date established for voting
on the Business Combination and other matters as may be described in the
Registration Statement. Stockholders are able to obtain copies of the proxy
statement/prospectus and other documents filed with the SEC that will be
incorporated by reference in the proxy statement/prospectus, without charge, at
the SEC's web site at sec.gov, or by directing a request to: Holicity Inc., 2300
Carillon Point, Kirkland, WA 98033, Attention: Craig McCaw, Chief Executive
Officer, (425) 278-7100.
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Participants in the Solicitation
The Company and its directors and executive officers may be deemed participants
in the solicitation of proxies from the Company's stockholders with respect to
the Business Combination. A list of the names of those directors and executive
officers and a description of their interests in the Company is contained in the
Company's registration statement on Form S-1, which was initially filed with the
SEC on July 17, 2020, and is available free of charge at the SEC's web site at
sec.gov, or by directing a request to Holicity Inc., 2300 Carillon Point,
Kirkland, WA 98033, Attention: Secretary, (425) 278-7100. Additional information
regarding the interests of such participants is contained in the Registration
Statement.
Astra and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the stockholders of the Company
in connection with the Business Combination. A list of the names of such
directors and executive officers and information regarding their interests in
the Business Combination is contained in the Registration Statement.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. The Company's and Astra's actual results may differ from
their expectations, estimates and projections and consequently, you should not
rely on these forward looking statements as predictions of future events. Words
such as "expect," "estimate," "project," "budget," "forecast," "anticipate,"
"intend," "plan," "may," "will," "could," "should," "believes," "predicts,"
"potential," "continue," and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements include, without
limitation, the Company's and Astra's expectations with respect to future
performance and anticipated financial impacts of the Business Combination, the
satisfaction of the closing conditions to the Business Combination and the
timing of the completion of the Business Combination. These forward-looking
statements involve significant risks and uncertainties that could cause the
actual results to differ materially from the expected results. Most of these
factors are outside the Company's and Astra's control and are difficult to
predict. Factors that may cause such differences include, but are not limited
to: (1) the outcome of any legal proceedings that may be instituted against the
Company and Astra following the announcement of the Business Combination
Agreement and the transactions contemplated therein; (2) the inability to
complete the Business Combination, including due to failure to obtain approval
of the stockholders of the Company or Astra, approvals or other determinations
from certain regulatory authorities, or other conditions to closing in the
Business Combination Agreement; (3) the occurrence of any event, change or other
circumstance that could give rise to the termination of the Business Combination
Agreement or could otherwise cause the transactions contemplated therein to fail
to close; (4) the inability to obtain or maintain the listing of New Astra's
Class A common stock on Nasdaq following the Business Combination; (5) the risk
that the Business Combination disrupts current plans and operations as a result
of the announcement and consummation of the Business Combination; (6) the
ability to recognize the anticipated benefits of the Business Combination, which
may be affected by, among other things, competition and the ability of the
combined company to grow and manage growth profitably and retain its key
employees; (7) costs related to the Business Combination; (8) changes in
applicable laws or regulations; (9) the possibility that Astra or the combined
company may be adversely affected by other economic, business, and/or
competitive factors; (10) the surviving entity's ability to raise financing in
the future and to comply with restrictive covenants related to long-term
indebtedness; (11) the impact of COVID-19 on Astra's business and/or the ability
of the parties to complete the Business Combination; and (12) other risks and
uncertainties indicated from time to time in the proxy statement/prospectus
relating to the Business Combination, including those under "Risk Factors" in
the Registration Statement, and in the Company's other filings with the SEC. The
Company cautions that the foregoing list of factors is not exclusive. The
Company and Astra caution readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made. The Company
and Astra do not undertake or accept any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements to reflect
any change in its expectations or any change in events, conditions or
circumstances on which any such statement is based.
No Offer or Solicitation
This Current Report on Form 8-K shall not constitute a solicitation of a proxy,
consent or authorization with respect to any securities or in respect of the
Business Combination. This Current Report on Form 8-K shall also not constitute
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any states or jurisdictions in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act.
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