Form 4: Starco Brands: GV 2016 Entities Receive Additional Shares Following Post-Closing Adjustment
SEC Form 4
GV 2016 entities, including Alphabet Inc., received 47,980,156 shares of Starco Brands Class A Common Stock due to a post-closing purchase price adjustment related to the Soylent acquisition.
Summary
- GV 2016 GP, L.L.C., GV 2016 GP, L.P., GV 2016, L.P., and Alphabet Inc. have reported changes in their beneficial ownership of Starco Brands, Inc. [STCB] Class A Common Stock.
- The changes are due to the receipt of 47,980,156 shares as a post-closing purchase price adjustment related to the Soylent Nutrition, Inc. acquisition.
- This adjustment was triggered because the volume weighted average trading price of Starco Brands' Class A Common Stock was less than $0.35 per share for the 30-trading day period ending on May 15, 2025.
- Following the transaction, GV 2016, L.P. directly holds 147,490,961 shares of Class A Common Stock.
- The reporting persons disclaim beneficial ownership of these securities except to the extent of their pecuniary interest.
Sentiment
Score: 4
Explanation: The document itself is neutral, but the triggering of the post-closing adjustment due to low stock price is a negative signal. The large shareholding by GV 2016 could also create overhang.
Negatives
- The post-closing adjustment was triggered because the volume weighted average trading price of Starco Brands' Class A Common Stock was less than $0.35 per share, indicating potential underperformance.
Risks
- Continued low stock price could trigger further adjustments or indicate underlying business challenges.
Industry Context
Post-closing adjustments are common in mergers and acquisitions to account for performance-based considerations. The fact that this adjustment was triggered suggests that Starco Brands' stock performance has not met the expectations outlined in the Merger Agreement.
Comparison to Industry Standards
- Post-closing adjustments are a standard feature in M&A deals, often tied to earn-out provisions or working capital adjustments.
- Similar adjustments can be seen in deals like the acquisition of Whole Foods by Amazon, where post-closing adjustments were made based on inventory valuations.
- The specific trigger of a stock price below $0.35 is unique to this agreement and reflects the negotiated terms between Starco Brands and the Soylent equityholders.
Stakeholder Impact
- Shareholders may be concerned about the stock's underperformance.
- The dilution effect of the additional shares could put downward pressure on the stock price.
Key Dates
| Date | Description |
|---|---|
| February 14, 2023 | Date of the Merger Agreement between Starco Brands, Starco Merger Sub I, Inc., Soylent Nutrition, Inc., and Hamilton Start, LLC. |
| February 15, 2023 | Sale of Soylent to Starco Brands. |
| March 15, 2024 | Date of the Stockholder Agreement between Starco Brands and certain Soylent stockholders. |
| February 14, 2024 | First measurement date for potential post-closing adjustment based on stock price. |
| May 15, 2025 | Date of the Second Post-Closing Adjustment and second measurement date for potential post-closing adjustment based on stock price. |
| 05/19/2025 | Date of filing. |
Keywords
Starco Brands, Soylent, GV 2016, Alphabet Inc., Beneficial Ownership, Class A Common Stock, Post-Closing Adjustment, Merger Agreement
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