NOTE 5 – ACQUISITIONS

Soylent Acquisition

On February 15, 2023, the Company completed the acquisition of Soylent through its wholly-owned subsidiary, Starco Merger Sub I, which merged with Soylent, with Soylent as the surviving entity. Soylent produces a wide range of plant-based nutrition products, including shakes, powders, and bars. The Soylent Acquisition was a cash and stock deal, with the Company paying $200,000 in cash as reimbursement of Soylent’s closing expenses and issuing shares of Class A common stock at $0.15 per share, which amount was equal to the fair value of the stock on the acquisition date. As part of the transaction, the Company reserved an (a) aggregate of up to 165,336,430 restricted shares of Class A common stock for Soylent shareholders, (b) 12,617,857 restricted shares of Class A common stock to satisfy existing Soylent change in control obligations, and (c) additional shares for change-in-control obligations and other financial adjustments (“Opening Balance Holdback”). A share price adjustment provision was included—if the Company’s stock trades below $0.35 per share on February 14, 2024, additional shares (the “Share Adjustment”) will be issued to compensate.

On March 15, 2024, the Company and certain former Soylent stockholders and current stockholders of the Company’s Class A common stock (the “Consenting Stockholders”) entered into a Stockholder Agreement (the “Stockholder Agreement”), modifying aspects of the Soylent Merger Agreement with respect to the Consenting Stockholders. The Stockholder Agreement modified the Share Adjustment calculation by using a 30-day volume-weighted average price (“VWAP”) and bifurcated the Share Adjustment into a share adjustment on February 14, 2024 (the “First Adjustment Date” and the shares issued thereby the “First Adjustment Shares”) and a share adjustment on May 15, 2025 (the “Second Adjustment Date” and the shares issued thereby the “Second Adjustment Shares”). Generally, if the Company’s Class A common stock based on the VWAP, is below $0.35 per share on each of the First Adjustment Date and the Second Adjustment Date, as applicable, additional shares would be issued at no extra cost to stockholders under the Stockholder Agreement. The fair value of share rights was estimated at $0.189 per share on the acquisition date, with a total share adjustment value of $36.7 million. At year-end 2023, the estimated fair value varied based on stockholder participation, resulting in a total adjustment value of $36.9 million.

Effective February 14, 2024, the First Adjustment Date, the Company settled $18,099,951 of the $36,931,330 fair value liability outstanding on December 31, 2023 by issuing 133,087,875 shares of Class A common stock to the Soylent Shareholders as outlined in the Soylent Merger Agreement and Stockholder Agreement, as applicable. On the same date, the Company also settled the “Equity Payable” balance of $2,446,380 from the Soylent Acquisition as of December 31, 2023 by issuing 16,309,203 shares of Class A common stock to the Soylent Shareholders, who were not Consenting Shareholders, as outlined in the Soylent Merger Agreement.

Effective May 20, 2024, it was determined, in accordance with the Soylent Merger Agreement, that 7,445,490 shares of the 18,571,429 shares of Class A Common Stock Opening Balance Holdback from the Soylent Shareholders were not due, the effect of which resulted in an adjustment to the liability of $1,012,587, which reduced the original settlement amount of $18,099,951 to a net settlement amount of $17,087,364. The Company has recorded additional adjustments in the fair value of the derivative liability to arrive at a total share adjustment value on the balance sheet of $5,607,174 as of March 31, 2025. The Company estimates it will issue 136,760,337 shares of its Class A common stock for the Second Share Adjustment (see Note 16 for additional information).