UNAUDITED
PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS
OF MARCH 31, 2021
(in
thousands)
|
|
NPA
(Historical)
(US GAAP)
|
|
|
AST
(Historical)
(US GAAP)
|
|
|
Combined
|
|
|
Pro Forma Adjustments
|
|
|
|
|
Pro Forma Combined
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
50,053
|
|
|
$
|
22,213
|
|
|
$
|
72,266
|
|
|
|
231,914
|
|
|
(A)
|
|
$
|
441,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
230,000
|
|
|
(B)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,295
|
)
|
|
(B)(D)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,050
|
)
|
|
(D)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28,363
|
)
|
|
(D)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(50,927
|
)
|
|
(E)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(350
|
)
|
|
(F)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
(G)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
-
|
|
|
|
1,070
|
|
|
|
1,070
|
|
|
|
-
|
|
|
|
|
|
1,070
|
|
Inventory
|
|
|
-
|
|
|
|
2,922
|
|
|
|
2,922
|
|
|
|
-
|
|
|
|
|
|
2,922
|
|
Prepaid expenses
|
|
|
48
|
|
|
|
1,023
|
|
|
|
1,071
|
|
|
|
-
|
|
|
|
|
|
1,071
|
|
Other current assets
|
|
|
54
|
|
|
|
6,820
|
|
|
|
6,874
|
|
|
|
(2,109
|
)
|
|
(D)
|
|
|
4,765
|
|
Property and Equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlueWalker 3 satellite - construction in progress
|
|
|
-
|
|
|
|
37,186
|
|
|
|
37,186
|
|
|
|
-
|
|
|
|
|
|
37,186
|
|
Property and equipment, net
|
|
|
-
|
|
|
|
11,772
|
|
|
|
11,772
|
|
|
|
-
|
|
|
|
|
|
11,772
|
|
Other Long-Term Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease right-of-use assets
|
|
|
-
|
|
|
|
6,782
|
|
|
|
6,782
|
|
|
|
-
|
|
|
|
|
|
6,782
|
|
Intangible assets, net
|
|
|
-
|
|
|
|
451
|
|
|
|
451
|
|
|
|
-
|
|
|
|
|
|
451
|
|
Goodwill, net
|
|
|
-
|
|
|
|
3,759
|
|
|
|
3,759
|
|
|
|
-
|
|
|
|
|
|
3,759
|
|
Investment and cash held in trust account
|
|
|
231,914
|
|
|
|
-
|
|
|
|
231,914
|
|
|
|
(231,914
|
)
|
|
(A)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets and deposits
|
|
|
-
|
|
|
|
172
|
|
|
|
172
|
|
|
|
-
|
|
|
|
|
|
172
|
|
Total Assets
|
|
$
|
282,069
|
|
|
$
|
94,170
|
|
|
$
|
376,239
|
|
|
|
134,820
|
|
|
|
|
$
|
511,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,258
|
|
|
$
|
5,750
|
|
|
$
|
7,008
|
|
|
$
|
(796
|
)
|
|
(C)
|
|
$
|
5,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(623
|
)
|
|
(D)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(236
|
)
|
|
(E)
|
|
|
|
|
Promissory note – related party
|
|
|
600
|
|
|
|
-
|
|
|
|
600
|
|
|
|
(600
|
)
|
|
(E)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued expenses
|
|
|
-
|
|
|
|
9,499
|
|
|
|
9,499
|
|
|
|
796
|
|
|
(C)
|
|
|
8,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,289
|
)
|
|
(D)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(91
|
)
|
|
(E)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(350
|
)
|
|
(F)
|
|
|
|
|
Deferred revenue
|
|
|
-
|
|
|
|
3,988
|
|
|
|
3,988
|
|
|
|
-
|
|
|
|
|
|
3,988
|
|
Current operating lease liability
|
|
|
-
|
|
|
|
488
|
|
|
|
488
|
|
|
|
-
|
|
|
|
|
|
488
|
|
Long-Term Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit from investors
|
|
|
50,000
|
|
|
|
-
|
|
|
|
50,000
|
|
|
|
(50,000
|
)
|
|
(E)
|
|
|
-
|
|
Deferred tax liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(H)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred underwriting fees payable
|
|
|
8,050
|
|
|
|
-
|
|
|
|
8,050
|
|
|
|
(8,050
|
)
|
|
(D)
|
|
|
-
|
|
Warrants liability
|
|
|
66,086
|
|
|
|
-
|
|
|
|
66,086
|
|
|
|
-
|
|
|
|
|
|
66,086
|
|
Non-current operating lease liability
|
|
|
-
|
|
|
|
6,439
|
|
|
|
6,439
|
|
|
|
-
|
|
|
|
|
|
6,439
|
|
Total Liabilities
|
|
|
125,994
|
|
|
|
26,164
|
|
|
|
152,158
|
|
|
|
(61,239
|
)
|
|
|
|
|
90,919
|
|
Redeemable Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Common stock subject to possible redemption
|
|
|
151,075
|
|
|
|
-
|
|
|
|
151,075
|
|
|
|
(151,075
|
)
|
|
(I)
|
|
|
-
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Common Stock
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
2
|
|
|
(B)
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
(G)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
(I)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
(K)
|
|
|
|
|
Class B Common Stock
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
(K)
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
(L)
|
|
|
|
|
Class C Common Stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
(L)
|
|
|
8
|
|
Series A convertible preferred units, net
|
|
|
-
|
|
|
|
9,394
|
|
|
|
9,394
|
|
|
|
(9,394
|
)
|
|
(L)
|
|
|
-
|
|
Series B convertible preferred units, net
|
|
|
-
|
|
|
|
102,717
|
|
|
|
102,717
|
|
|
|
(102,717
|
)
|
|
(L)
|
|
|
-
|
|
Founder’s common equity
|
|
|
-
|
|
|
|
5,832
|
|
|
|
5,832
|
|
|
|
(5,832
|
)
|
|
(L)
|
|
|
-
|
|
Accumulated other comprehensive income (loss)
|
|
|
-
|
|
|
|
(365
|
)
|
|
|
(365
|
)
|
|
|
365
|
|
|
(J)
|
|
|
-
|
|
Additional paid in capital
|
|
|
59,243
|
|
|
|
-
|
|
|
|
59,243
|
|
|
|
229,998
|
|
|
(B)
|
|
|
170,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5,295
|
)
|
|
(B) (D)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(28,560
|
)
|
|
(D)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
151,073
|
|
|
(I)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(299,118
|
)
|
|
(M)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(365
|
)
|
|
(J)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(54,245
|
)
|
|
(J)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
117,930
|
|
|
(L)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(86
|
)
|
|
(G)
|
|
|
|
|
Accumulated deficit
|
|
|
(54,245
|
)
|
|
|
(51,488
|
)
|
|
|
(105,733
|
)
|
|
|
54,245
|
|
|
(J)
|
|
|
(51,488
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity attributable to stockholders
|
|
|
5,000
|
|
|
|
66,090
|
|
|
|
71,090
|
|
|
|
48,016
|
|
|
|
|
|
119,106
|
|
Noncontrolling interests
|
|
|
-
|
|
|
|
1,916
|
|
|
|
1,916
|
|
|
|
299,118
|
|
|
(M)
|
|
|
301,034
|
|
Total equity
|
|
|
5,000
|
|
|
|
68,006
|
|
|
|
73,006
|
|
|
|
347,134
|
|
|
|
|
|
420,140
|
|
Total liabilities and equity
|
|
$
|
282,069
|
|
|
$
|
94,170
|
|
|
$
|
376,239
|
|
|
$
|
134,820
|
|
|
|
|
$
|
511,059
|
|
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR
THE THREE MONTHS ENDED MARCH 31, 2021
(in
thousands, except share and per share data)
|
|
NPA (Historical) (US GAAP)
|
|
|
AST (Historical) (US GAAP)
|
|
|
Combined
|
|
|
Pro
Forma Adjustments(1)
|
|
|
|
|
Pro
Forma Combined(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
951
|
|
|
$
|
951
|
|
|
$
|
-
|
|
|
|
|
$
|
951
|
|
Cost of Sales
|
|
|
-
|
|
|
|
(896
|
)
|
|
|
(896
|
)
|
|
|
-
|
|
|
|
|
|
(896
|
)
|
Gross Profit
|
|
|
-
|
|
|
|
55
|
|
|
|
55
|
|
|
|
-
|
|
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering services
|
|
|
-
|
|
|
|
(5,659
|
)
|
|
|
(5,659
|
)
|
|
|
-
|
|
|
|
|
|
(5,659
|
)
|
General and administrative cost
|
|
|
-
|
|
|
|
(5,537
|
)
|
|
|
(5,537
|
)
|
|
|
-
|
|
|
|
|
|
(5,537
|
)
|
Research and development cost
|
|
|
-
|
|
|
|
(304
|
)
|
|
|
(304
|
)
|
|
|
-
|
|
|
|
|
|
(304
|
)
|
Formation and operating cost
|
|
|
(1,435
|
)
|
|
|
-
|
|
|
|
(1,435
|
)
|
|
|
30
|
|
|
AA
|
|
|
(1,405
|
)
|
Depreciation and amortization
|
|
|
-
|
|
|
|
(614
|
)
|
|
|
(614
|
)
|
|
|
-
|
|
|
|
|
|
(614
|
)
|
Total Operating Expense
|
|
|
(1,435
|
)
|
|
|
(12,114
|
)
|
|
|
(13,549
|
)
|
|
|
30
|
|
|
|
|
|
(13,519
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income and Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend Income
|
|
|
21
|
|
|
|
2
|
|
|
|
23
|
|
|
|
(21
|
)
|
|
BB
|
|
|
2
|
|
Changes in fair value of warrant liabilities
|
|
|
2,028
|
|
|
|
-
|
|
|
|
2,028
|
|
|
|
-
|
|
|
|
|
|
2,028
|
|
Interest expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Other income and (expense), net
|
|
|
-
|
|
|
|
(30
|
)
|
|
|
(30
|
)
|
|
|
-
|
|
|
|
|
|
(30
|
)
|
Total other income /(expense)
|
|
|
2,049
|
|
|
|
(28
|
)
|
|
|
2,021
|
|
|
|
(21
|
)
|
|
|
|
|
2,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
614
|
|
|
|
(12,087
|
)
|
|
|
(11,473
|
)
|
|
|
9
|
|
|
|
|
|
(11,464
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(17
|
)
|
|
|
(1
|
)
|
|
|
(18
|
)
|
|
|
-
|
|
|
|
|
|
(18
|
)
|
Net Loss
|
|
|
597
|
|
|
|
(12,088
|
)
|
|
|
(11,491
|
)
|
|
|
9
|
|
|
|
|
|
(11,482
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net loss attribute to non-controlling interest
|
|
|
-
|
|
|
|
508
|
|
|
|
508
|
|
|
|
7,171
|
|
|
CC
|
|
|
7,679
|
|
Loss attributable to stockholders
|
|
|
597
|
|
|
|
(11,580
|
)
|
|
|
(10,983
|
)
|
|
|
7,180
|
|
|
|
|
|
(3,803
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share
|
|
$
|
0.04
|
|
|
$
|
(2.50
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.07
|
)
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
13,827,085
|
|
|
|
5,500,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,729,704
|
|
UNAUDITED
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR
THE YEAR ENDED DECEMBER 31, 2020
(in
thousands, except share and per share data)
|
|
NPA (Historical) (US GAAP)
|
|
|
AST (Historical) (US GAAP)
|
|
|
Combined
|
|
|
Pro Forma Adjustments(1)
|
|
|
|
|
Pro Forma Combined(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
5,967
|
|
|
$
|
5,967
|
|
|
$
|
-
|
|
|
|
|
$
|
5,967
|
|
Cost of Sales
|
|
|
-
|
|
|
|
(3,025
|
)
|
|
|
(3,025
|
)
|
|
|
-
|
|
|
|
|
|
(3,025
|
)
|
Gross Profit
|
|
|
-
|
|
|
|
2,942
|
|
|
|
2,942
|
|
|
|
-
|
|
|
|
|
|
2,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering services
|
|
|
-
|
|
|
|
(13,081
|
)
|
|
|
(13,081
|
)
|
|
|
-
|
|
|
|
|
|
(13,081
|
)
|
General and administrative cost
|
|
|
-
|
|
|
|
(12,320
|
)
|
|
|
(12,320
|
)
|
|
|
(350
|
)
|
|
DD
|
|
|
(12,670
|
)
|
Research and development cost
|
|
|
-
|
|
|
|
(1,011
|
)
|
|
|
(1,011
|
)
|
|
|
-
|
|
|
|
|
|
(1,011
|
)
|
Formation and operating cost
|
|
|
(1,125
|
)
|
|
|
-
|
|
|
|
(1,125
|
)
|
|
|
120
|
|
|
AA
|
|
|
(1,005
|
)
|
Depreciation and amortization
|
|
|
-
|
|
|
|
(887
|
)
|
|
|
(887
|
)
|
|
|
-
|
|
|
|
|
|
(887
|
)
|
Total Operating Expense
|
|
|
(1,125
|
)
|
|
|
(27,299
|
)
|
|
|
(28,424
|
)
|
|
|
(230
|
)
|
|
|
|
|
(28,654
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income and Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend Income
|
|
|
1,480
|
|
|
|
71
|
|
|
|
1,551
|
|
|
|
(1,480
|
)
|
|
BB
|
|
|
71
|
|
Changes in fair value of warrant liabilities
|
|
|
(52,152
|
)
|
|
|
-
|
|
|
|
(52,152
|
)
|
|
|
-
|
|
|
|
|
|
(52,152
|
)
|
Interest expense
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
(10
|
)
|
|
|
-
|
|
|
|
|
|
(10
|
)
|
Other income and (expense), net
|
|
|
2
|
|
|
|
22
|
|
|
|
24
|
|
|
|
-
|
|
|
|
|
|
24
|
|
Total other income /(expense)
|
|
|
(50,670
|
)
|
|
|
83
|
|
|
|
(50,587
|
)
|
|
|
(1,480
|
)
|
|
|
|
|
(52,067
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(51,795
|
)
|
|
|
(24,274
|
)
|
|
|
(76,069
|
)
|
|
|
(1,710
|
)
|
|
|
|
|
(77,779
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(166
|
)
|
|
|
(131
|
)
|
|
|
(297
|
)
|
|
|
-
|
|
|
|
|
|
(297
|
)
|
Net Loss
|
|
|
(51,961
|
)
|
|
|
(24,405
|
)
|
|
|
(76,366
|
)
|
|
|
(1,710
|
)
|
|
|
|
|
(78,076
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net loss attribute to non-controlling interest
|
|
|
-
|
|
|
|
344
|
|
|
|
344
|
|
|
|
54,812
|
|
|
CC
|
|
|
55,156
|
|
Loss attributable to stockholders
|
|
|
(51,961
|
)
|
|
|
(24,061
|
)
|
|
|
(76,022
|
)
|
|
|
53,102
|
|
|
|
|
|
(22,920
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share
|
|
$
|
(6.13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.44
|
)
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
8,598,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,729,704
|
|
(1)
|
Net
loss per common share is based on the weighted average shares of Class A Common Stock and does not include Class B Common Stock and
Class C Common Stock as these shares are non-economic.
|
NOTES
TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1.
Basis of Presentation
The
Business Combination will be accounted for as a reverse recapitalization in accordance with GAAP as AST has been determined to be the
accounting acquirer, primarily due to the fact that AST shareholders continue to control the Company. Under this method of accounting,
while NPA is the legal acquirer, it is treated as the “acquired” company for financial reporting purposes. Accordingly, the
Business Combination was treated as the equivalent of AST issuing stock for the net assets of NPA, accompanied by a recapitalization.
The net assets of NPA are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business
Combination are those of AST.
The
unaudited pro forma condensed combined balance sheet as of March 31, 2021 assumes that the Business Combination occurred on March 31,
2021. The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 and for the year ended
December 31, 2020 present pro forma effect to the Business Combination as if they have been completed on January 1, 2020.
The
unaudited pro forma condensed combined balance sheet as of March 31, 2021 has been prepared using, and should be read in conjunction
with, the following:
|
●
|
NPA’s
unaudited condensed balance sheet as of March 31, 2021 and the related notes, incorporated by reference in this Form 8-K;
and
|
|
|
|
|
●
|
AST’s
unaudited condensed consolidated balance sheet as of March 31, 2021 and the related notes, incorporated by reference in this Form
8-K.
|
The
unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2021 has been prepared using, and
should be read in conjunction with, the following:
|
●
|
NPA’s
unaudited condensed statement of operations for the three months ended March 31, 2021 and the related notes, incorporated by reference
in this Form 8-K and
|
|
|
|
|
●
|
AST’s
unaudited condensed consolidated statement of operation for the three months ended March 31, 2021 and the related notes, incorporated
by reference in this Form 8-K.
|
The
unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020 has been prepared using, and should
be read in conjunction with, the following:
|
●
|
NPA’s
audited statement of operations for the year ended December 31, 2020 and the related notes, incorporated by reference in this Form
8-K and
|
|
|
|
|
●
|
AST’s
audited consolidated statement of operation for the year ended December 31, 2020 and the related notes, incorporated by reference
in this Form 8-K.
|
Management
has made significant estimates and assumptions in its determination of the pro forma adjustments. As the unaudited pro forma condensed
combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially
from the information presented.
The
unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies,
tax savings, cost savings or anticipated costs of operating a public company that may be associated with the Business Combination.
The
pro forma adjustments reflecting the completion of the Business Combination are based on certain currently available information and
certain assumptions and methodologies that we believe are reasonable under the circumstances. The unaudited condensed pro forma adjustments,
which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore,
it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material.
We believe that these assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business
Combination based on information available to management at the time and that the pro forma adjustments give appropriate effect to those
assumptions and are properly applied in the unaudited pro forma condensed combined financial information.
The
unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and
financial position would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future
consolidated results of operations or financial position of the Company. They should be read in conjunction with the historical financial
statements and notes thereto of the Company and AST.
2.
Accounting Policies
Upon
completion of the Business Combination, the Company’s management performed a comprehensive review of the two entities’ accounting
policies. As a result of the review, management may identify differences between the accounting policies of the two entities which, when
conformed, could have a material impact on the financial statements of the Company. Based on initial analysis, management did not identify
any differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the
unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.
3.
Adjustments to Unaudited Pro Forma Condensed Combined Financial Information
The
unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and
has been prepared for informational purposes only.
The
following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation
S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”.
Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the
transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects
that have occurred or reasonably expected to occur (“Management’s Adjustments”). We have elected not to present Management’s
Adjustments and will only be presenting Transaction Accounting Adjustments in the following unaudited pro forma condensed combined financial
information.
The
unaudited pro forma condensed combined provision for income taxes does not necessarily reflect the amounts that would have resulted had
the Company filed consolidated income tax returns during the periods presented.
The
unaudited pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statements of
operations are based upon the amount of Class A Common Stock outstanding, assuming the Business Combination occurred on January 1, 2020.
Adjustments
to Unaudited Pro Forma Condensed Combined Balance Sheet
The
adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2021 are as follows:
|
(A)
|
Reflects
the reclassification of $231.9 million of investments and cash held in the Trust Account at the balance sheet date that became available
to fund the Business Combination.
|
|
(B)
|
Represents
the gross proceeds of $230.0 million from the issuance of 23 million shares of Class A Common Stock at $0.0001 par value, in the
PIPE Investment offset by the PIPE Investment fee of $5.3 million.
|
|
(C)
|
Reflects
the reclassification of NPA’s historical accrued expenses to align with the balance sheet presentation of AST.
|
|
(D)
|
Reflects
the settlement of $43.7 million of transaction costs in connection with the Business Combination, of which $1.9 million has been
paid as of March 31, 2021. $5.3 million relates to the PIPE Investment fee as noted above and is reflected as a reduction of additional
paid-in capital as those are directly related to the equity raise. $8.1 million is the settlement of NPA’s deferred underwriting
compensation fees incurred during the IPO due upon completion of the Business Combination of which $4.8 million is payable to BTIG.
$1.9 million relates to the settlement of the accrued transaction expenses within accrued expenses and accounts payable. $2.1 million
of deferred transaction costs which is directly related to the equity raise is reflected within additional paid in capital. The remaining
settlement amount of $28.4 million relates to advisory, legal, and other fees incurred and is reflected within additional paid-in
capital.
|
|
(E)
|
Reflects
the settlement of NPA’s historical liabilities after payment of liabilities related to transaction costs in connection with
the Business Combination that was settled upon the close of the Business Combination.
|
|
|
|
|
(F)
|
Reflects
the reduction in cash and accrued expenses for the one-time discretionary transaction bonus approved by the AST board of directors
to Mr. Severson for efforts towards the completion of the Business Combination.
|
|
|
|
|
(G)
|
Reflects the actual redemption of 8,460 shares of NPA
Common Stock for aggregate redemption payments of $0.09 million at a redemption price of approximately $10.09 per share and
allocated to Class A Common Stock and additional paid-in capital using par value $0.0001 per share as of the close of the
transaction. Total redemption payments were $0.2 million which includes $0.12 million of payments incurred prior to March 31,
2021.
|
|
|
|
|
(H)
|
Pursuant
to the Tax Receivable Agreement, the Company is generally required to pay the TRA Holders 85% of the amount of savings, if any, in
U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest
related thereto that the Tax Group realizes, or is deemed to realize, as a result of certain Tax Attributes, which include existing
tax basis in certain assets of AST and certain of its direct or indirect Subsidiaries, including assets that will eventually be subject
to depreciation or amortization, once placed in service, attributable to AST Common Units acquired by the Company from a TRA Holder
(including AST Common Units held by a Blocker Corporation acquired in a Reorganization Transaction (as defined in the Tax Receivable
Agreement)), each as determined at the time of the relevant acquisitions; tax basis adjustments resulting from taxable exchanges
of AST Common Units (including any such adjustments resulting from certain payments made by the Company under the Tax Receivable
Agreement) acquired by the Company from a TRA Holder pursuant to the terms of the A&R Operating Agreement; tax deductions in
respect of portions of certain payments made under the Tax Receivable Agreement; and certain tax attributes of Blocker Corporations
holding AST Common Units that are acquired directly or indirectly by the Company pursuant to a Reorganization Transaction.
|
Upon
the completion of the Business Combination, the Tax Group did not acquire any AST Common Units in an Exchange or Reorganization Transaction,
as defined in the Tax Receivable Agreement. As a result, no Tax Receivable Agreement liability has been recorded. As part of the Business
Combination, the Company obtains an increased tax basis in its AST Common Units. The gross (pre-tax) deferred tax asset relating to SpaceMobile’s
investment in AST is approximately $299 million. The Company has assessed the realizability of their deferred tax assets and in that
analysis has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some
portion or all of the deferred tax assets will be realized. As a result, the Company has recorded a full valuation allowance against
its deferred tax assets. A full valuation allowance on deferred tax assets will be maintained until there is sufficient evidence to support
the reversal of all or some portion of these allowances.
|
(I)
|
Reflects
the reclassification of the NPA Class A Common Stock subject to possible redemption to permanent equity at $0.0001 par value.
|
|
|
|
|
(J)
|
Reflects
the reclassification of NPA’s historical accumulated deficit and AST’s accumulated other comprehensive loss to additional
paid in capital as part of the recapitalization.
|
|
|
|
|
(K)
|
Reflects
the conversion of Founder Shares to Class A Common Stock at the closing of the Business Combination. In connection with the closing
of the Business Combination, all Founder Shares converted into shares of Class A Common Stock.
|
|
|
|
|
(L)
|
Reflects
conversion of redeemable preferred units and AST Series A Preferred Units and AST Series B Preferred Units into AST Common Units,
and the recapitalization of AST as the issuance of Class B Common Stock and Class C Common Stock as consideration for the reverse
recapitalization.
|
|
|
|
|
(M)
|
Reflects
the recognition of 71% noncontrolling interests as a result of the Up-C structure. The noncontrolling interest is determined based
on the noncontrolling interest percentage of NPA’s pro forma equity less certain adjustments.
|
Our
A&R Operating Agreement provides that the AST Common Units not held by us provide each member with the right to cause us to redeem
its AST Common Units in whole or in part at any time and from time to time following the waiver or expiration of the lock-up period pursuant
to the Stockholders’ Agreement. NPA, as the Managing Member of AST, shall have the option to elect to have the AST Common Units
redeemed for either shares of Class A Common Stock or cash as set forth in the A&R Operating Agreement (the “Cash Settlement”).
We established a committee to exercise full control over all decisions on settlement for noncontrolling interest redemptions. The committee,
named the Redemption Election Committee, has the fiduciary duties to act in the best interests of all of our stockholders, was delegated
the full power of our board in respect of redemption settlement decisions, and consists solely of directors that are neither nominated
by, or affiliated with, any noncontrolling interest holders.
Further,
the settlement decisions made by the Redemption Election Committee will be solely in the Company’s control and cannot be overridden
or vetoed by other board members, including Mr. Avellan. Under the Stockholders’ Agreement, the Stockholder Parties agreed that,
until such date as the Stockholder Parties collectively control less than 50% of the total voting power of the Company, (i) the Stockholder
Parties will take all necessary action to cause the Company and the Company’s Board to maintain the Redemption Election Committee
of the Company’s Board and its delegated powers and (ii) the provisions of the Stockholders’ Agreement relating to the Redemption
Election Committee cannot be amended without the express approval of the Redemption Election Committee.
The
noncontrolling interest was classified as permanent equity within the pro forma balance sheet as the Company, acting through the Special
Redemption Committee, may only elect to settle a redemption request in cash if the cash delivered in the exchange is limited to the cash
proceeds to be received from a new permanent equity offering through issuance of Class A Common Stock in accordance with Section 11.1.2
of the Operating Agreement.
Adjustments
to Unaudited Pro Forma Condensed Combined Statements of Operations
The
pro forma adjustments included in the unaudited pro forma condensed combined statements of operations for the three months ended March
31, 2021 are as follows:
|
(AA)
|
Reflects
the elimination of NPA’s administrative service fee paid to the Sponsor that ceased upon the close of the Business Combination.
|
|
|
|
|
(BB)
|
Reflects
elimination of interest income and dividends earned on the Trust Account.
|
|
|
|
|
(CC)
|
Reflects
the recognition of net income attributable to the 71% noncontrolling interests as a result of the Up-C structure.
|
|
|
|
|
(DD)
|
Reflects
the one-time payment of a discretionary transaction bonus approved by the AST board of directors to Mr. Severson for efforts towards
the completion of the Business Combination.
|
4.
Earnings per Share
Represents
net earnings per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in
connection with the Business Combination, assuming the shares were outstanding since January 1, 2020. As the Business Combination are
being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding
for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding
for the entire periods presented.
(in thousands, except share and per share data)
|
|
Three months
ended
March 31, 2021
|
|
|
Twelve months ended
December 31, 2020
|
|
Pro forma net loss attributable to stockholders
|
|
$
|
(3,803
|
)
|
|
$
|
(22,920
|
)
|
Pro forma weighted average Class A Common Stock – basic and diluted
|
|
|
51,729,704
|
|
|
|
51,729,704
|
|
Pro forma Class A net loss per ordinary share
|
|
$
|
(0.07
|
)
|
|
$
|
(0.44
|
)
|
Pro forma weighted average Class A shares outstanding – basic and diluted
|
|
|
|
|
|
|
|
|
Class A – Public Stockholders
|
|
|
22,979,704
|
|
|
|
22,979,704
|
|
Class A – Sponsors
|
|
|
5,750,000
|
|
|
|
5,750,000
|
|
Total New Providence Acquisition Corp.
|
|
|
28,729,704
|
|
|
|
28,729,704
|
|
Class A – Private Placement Investors (PIPE)
|
|
|
23,000,000
|
|
|
|
23,000,000
|
|
Pro forma weighted average Class A shares outstanding – basic and diluted(1)
|
|
|
51,729,704
|
|
|
|
51,729,704
|
|
|
(1)
|
The
Class B Common Stock and Class C Common Stock issued for consideration are non-economic and as such are excluded from the earnings
per share calculation. For the purposes of applying the treasury stock method for calculating diluted earnings per share, it was
assumed that all outstanding warrants sold in the IPO and warrants sold in the private placement are exchanged for 17.6 million underlying
Class A Common Stock. However, this results in anti-dilution, and the effect of such exchange was not included in calculation of
diluted earnings per share.
|
Exhibit 99.4
AST
& Science LLC and Subsidiaries
Financial
Statements As of and for The Three Months Ended March 31, 2021 and 2020 (UNAUDITED)
AST
& Science LLC and Subsidiaries
Index
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
AST
& SCIENCE LLC AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars
in thousands, except per share data)
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
22,213
|
|
|
$
|
42,777
|
|
Accounts receivable, net
|
|
|
1,070
|
|
|
|
2,081
|
|
Inventory
|
|
|
2,922
|
|
|
|
2,591
|
|
Prepaid expenses
|
|
|
1,023
|
|
|
|
1,249
|
|
Other current assets
|
|
|
6,820
|
|
|
|
2,234
|
|
Total current assets
|
|
|
34,048
|
|
|
|
50,932
|
|
|
|
|
|
|
|
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
|
BlueWalker 3 Satellite - construction in progress
|
|
|
37,186
|
|
|
|
27,013
|
|
Property and equipment, net
|
|
|
11,772
|
|
|
|
10,057
|
|
Total property and equipment, net
|
|
|
48,958
|
|
|
|
37,070
|
|
|
|
|
|
|
|
|
|
|
Other long-term assets:
|
|
|
|
|
|
|
|
|
Operating lease right-of-use assets
|
|
|
6,782
|
|
|
|
7,045
|
|
Intangible assets, net
|
|
|
451
|
|
|
|
526
|
|
Goodwill
|
|
|
3,759
|
|
|
|
3,912
|
|
Other assets and deposits
|
|
|
172
|
|
|
|
160
|
|
Total other long-term assets, net
|
|
|
11,164
|
|
|
|
11,643
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
94,170
|
|
|
$
|
99,645
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
5,750
|
|
|
$
|
4,990
|
|
Accrued expenses and other current liabilities
|
|
|
9,499
|
|
|
|
4,222
|
|
Deferred revenue
|
|
|
3,988
|
|
|
|
3,401
|
|
Current operating lease liabilities
|
|
|
488
|
|
|
|
504
|
|
Total current liabilities
|
|
|
19,725
|
|
|
|
13,117
|
|
|
|
|
|
|
|
|
|
|
Non-current operating lease liabilities
|
|
|
6,439
|
|
|
|
6,541
|
|
Total liabilities
|
|
|
26,164
|
|
|
|
19,658
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’ equity:
|
|
|
|
|
|
|
|
|
Series A convertible preferred stock, $0.01 par value, authorized 684,932 shares, 684,932 shares issued and outstanding as of March 31, 2021 and December 31, 2020 (liquidation preference of $20,000 at March 31, 2021 and December 31, 2020)
|
|
|
9,394
|
|
|
|
9,394
|
|
Series B convertible preferred stock, $0.01 par value per share - 2,765,027 shares authorized and outstanding as of March 31, 2021 and December 31, 2020 (liquidation preference of $121,822 at March 31, 2021 and $119,636 at December 31, 2020)
|
|
|
102,717
|
|
|
|
102,717
|
|
Members’ common equity, 10,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 5,500,840 shares issued and outstanding as of March 31, 2021 and December 31, 2020
|
|
|
5,832
|
|
|
|
5,462
|
|
Accumulated other comprehensive income (loss)
|
|
|
(365
|
)
|
|
|
(168
|
)
|
Accumulated Deficit
|
|
|
(51,488
|
)
|
|
|
(39,908
|
)
|
Noncontrolling interest
|
|
|
1,916
|
|
|
|
2,490
|
|
Total members’ equity
|
|
|
68,006
|
|
|
|
79,987
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND MEMBERS’ EQUITY
|
|
$
|
94,170
|
|
|
$
|
99,645
|
|
See
accompanying notes to the condensed consolidated financial statements
AST
& SCIENCE LLC AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR
THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(dollars
in thousands, except per share data)
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
951
|
|
|
$
|
773
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
(896
|
)
|
|
|
(1,030
|
)
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
55
|
|
|
|
(257
|
)
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Engineering services
|
|
|
5,659
|
|
|
|
2,148
|
|
General and administrative costs
|
|
|
5,537
|
|
|
|
2,178
|
|
Research and development costs
|
|
|
304
|
|
|
|
43
|
|
Depreciation and amortization
|
|
|
614
|
|
|
|
120
|
|
Total operating expenses
|
|
|
12,114
|
|
|
|
4,489
|
|
|
|
|
|
|
|
|
|
|
Other income and expense:
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
2
|
|
|
|
36
|
|
Interest expense
|
|
|
-
|
|
|
|
(23
|
)
|
Other income and (expense), net
|
|
|
(30
|
)
|
|
|
(3
|
)
|
Total other income (expense)
|
|
|
(28
|
)
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Net loss before income taxes
|
|
|
(12,087
|
)
|
|
|
(4,736
|
)
|
Income taxes
|
|
|
(1
|
)
|
|
|
-
|
|
Net loss
|
|
|
(12,088
|
)
|
|
|
(4,736
|
)
|
|
|
|
|
|
|
|
|
|
Add: Net loss attributable to noncontrolling interests
|
|
|
508
|
|
|
|
329
|
|
Net loss attributable to AST&Science
|
|
$
|
(11,580
|
)
|
|
$
|
(4,407
|
)
|
Cumulative convertible preferred stock dividends
|
|
$
|
(2,186
|
)
|
|
$
|
(1,611
|
)
|
Income available to common shareholders
|
|
$
|
(13,766
|
)
|
|
$
|
(6,018
|
)
|
Basic and diluted net loss per share
|
|
$
|
(2.50
|
)
|
|
$
|
(1.09
|
)
|
Basic and diluted shares used in computing net loss per share
|
|
|
5,500,840
|
|
|
|
5,500,000
|
|
See
accompanying notes to the condensed consolidated financial statements
AST
& SCIENCE LLC AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
FOR
THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(dollars
in thousands, except per share data)
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(12,088
|
)
|
|
$
|
(4,736
|
)
|
Foreign currency translation adjustments
|
|
|
(263
|
)
|
|
|
173
|
|
Comprehensive loss
|
|
|
(12,351
|
)
|
|
|
(4,563
|
)
|
Comprehensive loss attributable to noncontrolling interest:
|
|
|
|
|
|
|
|
|
Add: Net loss attributable to noncontrolling interests
|
|
|
508
|
|
|
|
329
|
|
Foreign currency translation adjustments
|
|
|
(66
|
)
|
|
|
103
|
|
Comprehensive loss attributable to AST&Science
|
|
$
|
(11,909
|
)
|
|
$
|
(4,131
|
)
|
See
accompanying notes to the consolidated financial statements
AST
& SCIENCE LLC AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND MEMBERS’ EQUITY (UNAUDITED)
|
(dollars
in thousands)
|
|
|
Series
B Redeemable Preferred Stock
|
|
|
|
Series
A Preferred Stock
|
|
|
Series
B Preferred Stock
|
|
|
Common
Equity
|
|
|
Promissory
Note from
Common
|
|
|
Accumulated
Other
Comprehensive
|
|
|
Accumulated
|
|
|
Noncontrolling
|
|
|
Total
|
|
|
Shares
|
|
|
Values
|
|
|
|
Shares
|
|
|
Values
|
|
|
Shares
|
|
|
Values
|
|
|
Shares
|
|
|
Values
|
|
|
Shareholder
|
|
|
Loss
|
|
|
Deficit
|
|
|
Interest
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2020
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
684,932
|
|
|
$
|
9,394
|
|
|
|
2,765,027
|
|
|
$
|
102,717
|
|
|
|
5,500,840
|
|
|
$
|
5,462
|
|
|
$
|
-
|
|
|
$
|
(168
|
)
|
|
$
|
(39,908
|
)
|
|
$
|
2,490
|
|
|
$79,987
|
Stock-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
370
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
370
|
Unrealized foreign currency translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(197
|
)
|
|
|
-
|
|
|
|
(66
|
)
|
|
(263)
|
Net income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11,580
|
)
|
|
|
(508
|
)
|
|
(12,088)
|
Balance, March 31, 2021
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
684,932
|
|
|
$
|
9,394
|
|
|
|
2,765,027
|
|
|
$
|
102,717
|
|
|
|
5,500,840
|
|
|
$
|
5,832
|
|
|
$
|
-
|
|
|
$
|
(365
|
)
|
|
$
|
(51,488
|
)
|
|
$
|
1,916
|
|
|
$68,006
|
|
|
Series
B Redeemable Preferred Stock
|
|
|
|
Series
A Preferred Stock
|
|
|
Series
B Preferred Stock
|
|
|
Common
Equity
|
|
|
Promissory Note from
Common
|
|
|
Accumulated Other
Comprehensive
|
|
|
Accumulated
|
|
|
Noncontrolling
|
|
|
Total
|
|
|
Shares
|
|
|
Values
|
|
|
|
Shares
|
|
|
Values
|
|
|
Shares
|
|
|
Values
|
|
|
Shares
|
|
|
Values
|
|
|
Shareholder
|
|
|
Loss
|
|
|
Deficit
|
|
|
Interest
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
684,932
|
|
|
$
|
9,394
|
|
|
|
773,376
|
|
|
$
|
28,847
|
|
|
|
5,500,000
|
|
|
$
|
5,171
|
|
|
$
|
(100
|
)
|
|
$
|
(329
|
)
|
|
$
|
(15,847
|
)
|
|
$
|
2,613
|
|
|
$29,749
|
Issuance of Series B Redeemable Convertible Preferred
Stock, net of issuance costs of $5,889
|
|
|
1,966,704
|
|
|
|
72,944
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
Issuance of Series B Convertible Preferred Stock, net
of issuance costs of $69
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,947
|
|
|
|
926
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
926
|
Stock-based compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
21
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
21
|
Unrealized foreign currency translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
70
|
|
|
|
-
|
|
|
|
103
|
|
|
173
|
Net income (loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,407
|
)
|
|
|
(329
|
)
|
|
(4,736)
|
Balance, March 31, 2020
|
|
|
1,966,704
|
|
|
$
|
72,944
|
|
|
|
|
684,932
|
|
|
$
|
9,394
|
|
|
|
798,323
|
|
|
$
|
29,773
|
|
|
|
5,500,000
|
|
|
$
|
5,192
|
|
|
$
|
(100
|
)
|
|
$
|
(259
|
)
|
|
$
|
(20,254
|
)
|
|
$
|
2,387
|
|
|
$26,133
|
See
accompanying notes to the condensed consolidated financial statements
AST
& SCIENCE LLC AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR
THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020
(dollars
in thousands)
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(12,088
|
)
|
|
$
|
(4,736
|
)
|
Adjustments to reconcile net loss to cash used in operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
557
|
|
|
|
68
|
|
Amortization of intangible assets
|
|
|
57
|
|
|
|
52
|
|
Non-cash operating lease expense
|
|
|
100
|
|
|
|
65
|
|
Stock-based compensation
|
|
|
370
|
|
|
|
21
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
942
|
|
|
|
(968
|
)
|
Prepaid expenses and other current assets
|
|
|
100
|
|
|
|
(14
|
)
|
Inventory
|
|
|
(443
|
)
|
|
|
(443
|
)
|
Accounts payable and accrued expenses
|
|
|
1,273
|
|
|
|
1,114
|
|
Operating lease liabilities
|
|
|
(94
|
)
|
|
|
(65
|
)
|
Deferred revenue
|
|
|
725
|
|
|
|
727
|
|
Other current assets and liabilities
|
|
|
(12
|
)
|
|
|
(56
|
)
|
Net cash used in operating activities
|
|
|
(8,513
|
)
|
|
|
(4,235
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
(2,728
|
)
|
|
|
(736
|
)
|
BlueWalker 3 Satellite - construction in process
|
|
|
(8,709
|
)
|
|
|
(3,200
|
)
|
Net cash used in investing activities
|
|
|
(11,437
|
)
|
|
|
(3,936
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Repayment for Founder bridge loan
|
|
|
-
|
|
|
|
(1,750
|
)
|
Proceeds from issuance of Series B Redeemable Preferred Stock
|
|
|
-
|
|
|
|
78,833
|
|
Issuance costs from issuance of Series B Redeemable Preferred Stock
|
|
|
-
|
|
|
|
(5,889
|
)
|
Proceeds from issuance of Series B Preferred Stock
|
|
|
-
|
|
|
|
1,000
|
|
Issuance costs from issuance of Series B Preferred Stock
|
|
|
-
|
|
|
|
(1,851
|
)
|
Direct and incremental costs incurred for the merger with NPA
|
|
|
(595
|
)
|
|
|
-
|
|
Net cash provided by (used in) financing activities
|
|
|
(595
|
)
|
|
|
70,343
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
|
(19
|
)
|
|
|
252
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(20,564
|
)
|
|
|
62,424
|
|
Cash and cash equivalents, beginning of period
|
|
|
42,777
|
|
|
|
26,498
|
|
Cash and cash equivalents, end of period
|
|
$
|
22,213
|
|
|
$
|
88,922
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
Non-cash investing activities:
|
|
|
|
|
|
|
|
|
Purchase of accrued construction in process
|
|
$
|
3,263
|
|
|
$
|
-
|
|
Purchase of accrued property and equipment
|
|
|
362
|
|
|
|
-
|
|
Right-of-use assets obtained in exchange for operating lease liabilities as of January 1, 2020 upon adoption of ASC 842
|
|
|
-
|
|
|
|
6,472
|
|
Non-cash financing activities:
|
|
|
|
|
|
|
|
|
Accrued direct and incremental cost incurred for the merger with NPA
|
|
$
|
4,064
|
|
|
$
|
-
|
|
See
accompanying notes to the condensed consolidated financial statements
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
1.
|
Organization
and Nature of Operations
|
AST
& Science LLC and its subsidiaries (“AST” or the “Company”) is an innovative satellite designer and manufacturer.
AST is currently in the process of testing, developing and building its BlueWalker 3 test satellite in advance of manufacturing and launching
the first space-based global cellular broadband network distributed through a constellation of Low Earth Orbit Satellites (the
“AST Satellite Constellation”). Once deployed and operational, the AST Satellite Constellation will provide connectivity
directly to standard/unmodified cellular phones or any 2G/3G/4G LTE and 5G enabled device (the “SpaceMobile Service”). The
SpaceMobile Service will be made available to cellular subscribers and others through wholesale commercial roaming agreements with cellular
service providers on a global basis. The Company operates from five locations that include its corporate headquarters and 85,000 square
foot satellite assembly, integrating and testing facility in Midland, Texas, and development offices located in Maryland, Spain, United
Kingdom, and Israel. In addition, its 51% owned and controlled subsidiary, NanoAvionika, is located in Lithuania.
On
April 6, 2021 (the “Closing Date”), AST completed the previously announced business combination (“Business
Combination”) pursuant to that certain Equity Purchase Agreement, dated as of December 15, 2020 (the “Equity
Purchase Agreement”), by and among AST, New Providence Acquisition Corp. (“NPA”), the existing
equityholders of AST, New Providence Acquisition Management LLC, a Delaware limited liability company
(“Sponsor”), and Abel Avellan. Immediately, upon the completion of the Business Combination, NPA was
renamed AST SpaceMobile, Inc. and AST became a subsidiary of the AST SpaceMobile, Inc. The Business Combination is
documented in greater detail at Note 12.
There
continues to be uncertainties regarding the pandemic of the novel coronavirus (“COVID-19”), and the Company is closely
monitoring the impact of COVID-19 on all aspects of its business, including how it will impact its customers, employees, suppliers,
vendors, and business partners. Any estimates made herein may change as new events occur and additional information is obtained,
and actual results could differ materially from any estimates made herein under different assumptions or conditions. The Company
has evaluated the impact of the COVID-19 pandemic for the period ended March 31, 2021 and has not realized a material impact to
the Company’s technology development efforts or operations. The Company is unable to predict the impact that COVID-19 may
have on its financial position and operations moving forward due to the numerous uncertainties. The Company will continue to assess
the evolving impact of COVID-19.
The
accompanying unaudited condensed consolidated financial statements and related notes have been prepared by the Company in accordance
with accounting principles generally accepted in the United States (“US GAAP”). The financial statements include the
accounts of AST & Science LLC and its subsidiaries. Inter-company transactions and balances have been eliminated. Certain
information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have
been condensed or omitted pursuant to US GAAP relating to interim financial statements. The December 31, 2020 balances reported
herein are derived from the audited consolidated financial statements. In the opinion of management, these unaudited condensed
consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly
state the condensed consolidated financial statements.
The
accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s
annual financial statements for the year ended December 31, 2020. The results of operations for the three month period ended March
31, 2021 are not indicative of the results to be expected for the year ending December 31, 2021.
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
Recent
Accounting Pronouncements
Adopted
accounting standards
In
August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives
and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts
in an Entity’s Own Equity, to reduce complexity in applying GAAP to certain financial instruments with characteristics
of liabilities and equity. The guidance in ASU 2020-06 simplifies the accounting for convertible debt and convertible preferred
stock by removing the requirements to separately present certain conversion features in equity. The amendments in ASU 2020-06
are effective for public entities that meet the definition of an SEC filer, excluding smaller reporting companies as defined by
the SEC, for fiscal years beginning after December 15, 2021. For all other entities, the amendments are effective for fiscal years
beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15,
2020. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an
interim reporting period. The Company adopted the new standard on January 1, 2021. The new standard did not have a material effect
on the financial statements as of March 31, 2021.
3.
|
Property
and Equipment
|
Property
and equipment, net consisted of the following at March 31, 2021 and December 31, 2020 (in thousands):
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Satellite testing and lab equipment
|
|
$
|
6,322
|
|
|
$
|
5,324
|
|
Computers, software, and equipment
|
|
|
1,959
|
|
|
|
1,707
|
|
Leasehold improvements
|
|
|
4,531
|
|
|
|
3,537
|
|
Other
|
|
|
412
|
|
|
|
404
|
|
Property and equipment
|
|
|
13,224
|
|
|
|
10,972
|
|
Accumulated depreciation
|
|
|
(1,452
|
)
|
|
|
(915
|
)
|
Property and equipment, net
|
|
|
11,772
|
|
|
|
10,057
|
|
|
|
|
|
|
|
|
|
|
BlueWalker 3 Satellite - construction in progress
|
|
|
37,186
|
|
|
|
27,013
|
|
Total property and equipment, net
|
|
$
|
48,958
|
|
|
$
|
37,070
|
|
Depreciation
expense for the three months ended March 31, 2021 and 2020 was approximately $0.6 million and $0.1 million, respectively.
4.
|
Convertible
Preferred Stock
|
On
June 26, 2018, the Company entered into a Series A Preferred Stock Purchase Agreement. Under the Agreement, the Company issued
an aggregate of 684,932 shares of Series A Preferred Stock (“Series A”) at a purchase price of $14.60 per share for
aggregate proceeds of $10 million. The proceeds are presented net of incurred issuance costs of approximately $0.6 million in
connection with the issuance of the Senior Preferred Shares.
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
On
October 16, 2019, the Company entered into a Series B Preferred Stock Purchase Agreement. Under the Agreement, the Company issued
an aggregate of 773,376 shares (the “Initial Series B Issuance”) of Series B Preferred Stock (“Series B”)
at a purchase price of $40.08 per share for aggregate proceeds of $31 million. The proceeds are presented net of incurred issuance
costs of approximately $2.1 million in connection with the issuance of the Senior Preferred Shares.
On
February 14, 2020, the Company entered into a Series B Preferred Stock Purchase Agreement. Under the Agreement, the Company issued
an aggregate of 1,966,704 shares (the “Second Series B Issuance”) of Series B Preferred Stock at a purchase price
of $40.08 per share for aggregate proceeds of $78.8 million (the “Rakuten Shares”) to Rakuten Mobile Singapore Pte.
Ltd. (“Rakuten”). In conjunction with the Second Series B Issuance, the Company also entered into a commercial agreement
with Rakuten (the “Rakuten Commercial Agreement”). The Rakuten Commercial Agreement requires that the Company adhere
to certain key performance indicators (“KPIs”) beginning on September 30, 2023 (the “First Measurement Date”)
and December 31, 2024 (the “Second Measurement Date”). If the Company is unable to meet or exceed these KPIs on the
First Measurement Date or the Second Measurement Date, or voluntarily or involuntary becomes subject to bankruptcy proceedings,
Rakuten will have the option to require the Company to redeem the Rakuten Shares at the redemption price of $30 per share (the
“Rakuten Redemption Clause”). Rakuten’s redemption rights will be extended for a period of no later than 6 months
if the Company’s failure to meet the KPIs as required arises from any failure or delays in obtaining any governmental or
third party approvals required in connection with the launch of the SpaceMobile Service or in connection with the delivery of
the KPIs. The Rakuten shares carry the same terms as the previously issued shares of Series B Preferred Stock, other than the
Rakuten Redemption Clause noted herein.
The
Company’s convertible preferred stock attributable to the Rakuten Shares was initially classified outside of members’
equity because the Rakuten Redemption Feature is not solely within the control of the Company. The Company’s policy is not
to accrete the carrying value and related issuance costs of the convertible preferred stock to its redemption value until it is
probable that the security will become redeemable.
On
December 15, 2020 (the “Amendment Date”), the Company executed the Amended and Restated Commercial Agreement (the
“A&R Commercial Agreement”) with Rakuten, which amended the Rakuten Commercial Agreement. The A&R Commercial
Agreement removes the Rakuten Redemption Clause from the Rakuten Shares and replaces it with a one-time cash payment penalty (the
“Penalty Payment”) of $10 million. The Penalty Payment is payable upon the Company’s failure to meet the KPIs
at the measurement dates originally established in the Rakuten Commercial Agreement.
The
amendment to Rakuten Commercial Agreement to replace the Rakuten Redemption Clause with the Penalty Payment was accounted for
as a modification of the Rakuten Shares for accounting purposes. In making this determination, the Company considered the significance
of the revisions to existing contractual terms. These revisions were not considered qualitatively or quantitatively significant
as the redemption clause was not deemed probable to be triggered when the shares were originally issued or as of the amendment
date. The Company determined that any incremental difference in the fair value of the shares as a result of the modification was
de minimis, and accordingly, the carrying value remained unchanged. Additionally, as the Rakuten Redemption Clause was removed
as part of the A&R Commercial Agreement, the Rakuten Shares are no longer redeemable outside of the control of the Company
and have been reclassified from temporary to permanent equity. The Penalty Payment, which replaced the Rakuten Redemption Clause,
is considered a revenue component of the A&R Commercial Agreement accounted for under ASC 606. The Company considers this
a form of variable consideration which is fully constrained as of execution of the A&R Commercial Agreement as well as of
March 31, 2021.
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
On
February 26, 2020, the Company entered into another Series B Preferred Stock Purchase Agreement with Samsung Next Fund LLC. Under
the Agreement, the Company issued an aggregate of 24,947 shares (the “Third Series B Issuance”) of Series B Preferred
Stock for a purchase price of $40.08 per share for aggregate proceeds of $1 million. The Samsung shares carry the same terms as
the previously issued shares of Series B Preferred Stock.
As
of March 31, 2021, the Company has $11.0 million in aggregate preferred cumulative dividends equal to $3.98 per share.
5.
|
Commitments
and Contingencies
|
On
November 13, 2018, the Company entered into both an Economic Development Agreement (the “EDA”) and a sublease agreement
with Midland Development Corporation. The premise of the EDA was to create jobs in the Midland Texas area, as well as, to have
AST improve the land, office and hangar spaces at the Midland International Air & Space Port in Midland, Texas.
The
rentable spaces included office space (44,988 SF), hangar A (28,480 SF), hangar B (11,900 SF), and land (approximately 238,000
SF). The term of the lease commenced on November 21, 2018 and extends through November 20, 2033. Pursuant to the agreement, the
base rental payments for the first five years will be abated, provided that the Company prepays the rent in each period and achieves
an increasing level of financial commitments, measured annually on March 31st of each of the first five years of the lease. The
Company can qualify for an additional five years (years six through ten of the term) of abatements which are contingent upon the
Company achieving its commitments through the first five years of the lease and maintaining or exceeding those year five commitment
levels in years six through year ten of the term. These commitments include 1) the total number of full-time jobs and the related
annual payroll costs and 2) cumulative capital investments in personal property and improvements to the existing land/structures.
The Company recognizes the lease reimbursements as an offset to the lease asset, liability and rent expense for the related reimbursable
month when the contingency is probable of being resolved.
The
Company’s other outstanding operating leasehold obligations include additional office space in Maryland, Spain, Israel,
United Kingdom and Lithuania. The Company’s leases have established fixed payment terms which are subject to annual rent
increases throughout the term of each lease agreement. The Company’s lease agreements have varying non-cancellable rental
periods which include options for the Company to extend portions of its lease terms. Management considered that it was not reasonably
certain to exercise any extension options present in its lease arrangements that are outstanding as of the adoption date, with
the exception of the Texas sublease. In addition, the Company’s leases have similar terms in which they may terminate the
lease prior to the end date but must provide advanced notice. The Company is not reasonably certain to exercise the right to terminate
their agreements.
The
Company identified and assessed significant assumptions in recognizing the right-of-use asset and lease liability as follows:
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
Incremental
Borrowing Rate
The
Company derives its incremental borrowing rate from information available at the lease commencement date in determining the present
value of lease payments. The incremental borrowing rate represents a collateralized rate of interest the Company would have to
pay to borrow over a similar term an amount equal to the lease payments in a similar economic environment. The Company’s
lease agreements do not provide implicit rates. As the Company did not have any external borrowings at the transition date with
comparable terms to its lease agreements, the Company estimated its incremental borrowing rate based on the lowest grade of debt
available in the marketplace for the same term as the associated lease(s). The Company elected to use an 11.9% discount rate for
its main, shorter-term operating leases (generally two (2) to five (5) year leases). For the Texas sublease, which is greater
than 10 years, the Company elected to use a 15% discount rate. The weighted average discount rate at March 31, 2021 is 15%.
Operating
Leases
The
components of lease expense were as follows (in thousands):
|
|
Three Months Ended
March
31, 2021
|
|
Short-term operating lease expense
|
|
$
|
24
|
|
Operating lease expense
|
|
|
100
|
|
Total lease expense
|
|
$
|
124
|
|
Additional
lease information is summarized in the following table (in thousands, except lease term and discount rate):
|
|
Three Months Ended
March
31, 2021
|
|
Cash paid for amounts included in the measurement of operating lease liabilities
|
|
$
|
111
|
|
Operating right-of-use assets obtained in exchange for lease obligations
|
|
$
|
-
|
|
Weighted-average remaining lease term - operating leases (years)
|
|
|
11.4
|
|
Weighted-average discount rate - operating leases
|
|
|
15
|
%
|
As of March 31, 2021, the maturities of
the Company’s operating lease liabilities were as follows (in thousands):
Year ending December 31,
|
|
Amount
|
|
2021 (remaining)
|
|
$
|
1,075
|
|
2022
|
|
|
1,294
|
|
2023
|
|
|
1,312
|
|
2024
|
|
|
1,260
|
|
2025
|
|
|
1,158
|
|
Thereafter
|
|
|
7,701
|
|
Total lease payments
|
|
|
13,800
|
|
Less effects of discounting
|
|
|
(6,873
|
)
|
Present value of lease liabilities
|
|
$
|
6,927
|
|
Net
rent expense under operating lease arrangements at the Company was approximately $0.1 million and less than $0.1 million for the three
months ended March 31, 2021 and 2020, respectively.
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
Legal
Proceedings
The
Company is not a party to any material litigation and does not have contingency reserves established for any litigation liabilities
as of March 31, 2021 and December 31, 2020.
6.
|
Goodwill
and Intangible Assets
|
Goodwill
The
change in the carrying amount of goodwill for the three months ended March 31, 2021 and for the year ended December 31, 2020 is
summarized as follows (in thousands):
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Balance at beginning of the period
|
|
$
|
3,912
|
|
|
$
|
3,593
|
|
Acquisitions
|
|
|
|
|
|
|
-
|
|
Translation adjustments
|
|
$
|
(153
|
)
|
|
|
319
|
|
Balance at end of the period
|
|
$
|
3,759
|
|
|
$
|
3,912
|
|
Intangible
Assets
Identified
intangible assets are comprised of the following as of March 31, 2021 and December 31, 2020 (in thousands):
|
|
Useful Lives
|
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed technology
|
|
|
5
|
|
|
$
|
1,116
|
|
|
$
|
1,161
|
|
Trademarks and domain name
|
|
|
15
|
|
|
$
|
23
|
|
|
|
23
|
|
Total gross intangible assets subject to amortization
|
|
|
|
|
|
|
1,139
|
|
|
|
1,184
|
|
Accumulated amortization
|
|
|
|
|
|
|
(688
|
)
|
|
|
(658
|
)
|
Total net intangible assets subject to amortization
|
|
|
|
|
|
$
|
451
|
|
|
$
|
526
|
|
The
aggregate amortization expense for the three months ended March 31, 2021 and 2020 was less than $0.1 million and $0.1 million,
respectively. Based on the carrying value of identified intangible assets recorded at December 31, 2020, and assuming no subsequent
impairment of the underlying assets, the amortization expense is expected to be as follows (in thousands):
Fiscal Year
|
|
Amortization Expense
|
|
2021 (remaining)
|
|
|
169
|
|
2022
|
|
|
225
|
|
2023
|
|
|
39
|
|
2024
|
|
|
2
|
|
2025 and Thereafter
|
|
|
16
|
|
|
|
$
|
451
|
|
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
|
7.
|
Details
of Certain Balance Sheet Accounts
|
Inventories
Inventories
are carried at the lower of cost or net realizable value. Cost is determined by the first-in first-out (FIFO) method. The cost
of construction in progress comprises raw materials, satellite componentry, direct labor, and other direct engineering costs.
No reserve for excess and/or obsolete inventory was recognized in the periods presented.
Inventories
consisted of the following at March 31, 2021 and December 31, 2020 (in thousands):
|
|
March 31,
2021
|
|
|
December 31,
2020
|
|
Raw material
|
|
$
|
2,577
|
|
|
$
|
2,285
|
|
Work-in-process
|
|
|
345
|
|
|
|
306
|
|
Total
|
|
$
|
2,922
|
|
|
$
|
2,591
|
|
Accrued
Expenses
As
of December 31, 2020, accrued expenses includes accruals relating to the construction in process of $1.6 million and accrued payroll
of $1.0 million. The remaining balance within the account relates to other general accruals.
As
of March 31, 2021, accrued expenses amounted to $9.5 million, which include $5.0 million of transaction costs associated with the Business
Combination and $2.8 million in billings associated with construction in progress of the BlueWalker 3 Satellite. Accrued expenses also
included monthly recurring operating expenses, such as engineering consultant fess, lawyer fees, and electrical and power fees.
Other
current assets
The
Company capitalized $5.5 million as of March 31, 2021 and $1.1 million as of December 31, 2020 in transaction costs related to the Business
Combination with NPA that occurred on April 6, 2021. The transaction costs primarily include legal and underwriting fees.
Disaggregation
of Revenue
The
Company’s subsidiary, NanoAvionika, recognizes revenue related to sales of manufactured small satellites and their components
as well as launch related services. In general, the Company recognizes revenue for services provided over time as the Company’s
performance does not result in an asset with an alternative use and the Company is entitled to be compensated for performance
completed to date. The Company recognizes revenue for services provided over time based on an output method, under which the total
value of revenue is recognized based on each contract’s deliverable(s) as they are completed and when value is transferred
to a customer. Certain of the Company’s performance obligations do not meet the criteria for over time recognition. In these
scenarios, the Company recognizes revenue upon transfer of control of the performance obligation to the customer. Revenue recognized
over time versus revenue recognized upon transfer for the periods ending March 31, 2021 and 2020 was as follows (in thousands):
|
|
March
31,
2021
|
|
|
March
31,
2020
|
|
Revenue from performance obligations recognized over time
|
|
$
|
550
|
|
|
$
|
478
|
|
Revenue from performance obligations recognized at point-in-time transfer
|
|
|
401
|
|
|
|
295
|
|
Total
|
|
$
|
951
|
|
|
$
|
773
|
|
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
Contract
Balances
Contract
assets relate to our conditional right to consideration for our completed performance under the contract. Contract liabilities
relates to payments received in advance of performance under the contract. Contract liabilities (i.e., deferred revenue) are recognized
as revenue as (or when) the Company perform under the contract. During the three months ended March 31, 2021, the Company recognized
approximately $0.2 million of revenue related to its deferred revenue balance at January 1, 2021.
As
of March 31, 2021, the Company had deferred revenue of $4 million classified in current liabilities related to performance obligations
that have not yet been satisfied. The Company expects to recognize the revenue associated with satisfying these performance obligations
within the next 12 months.
Accounts
Receivable
The
Company receives payments from customers based on a billing schedule as established in our contracts. Accounts receivable includes amounts
billed and currently due from customers. Accounts receivable are recorded when the right to consideration becomes unconditional. The
Company did not reserve an allowance for doubtful accounts as of March 31, 2021 and 2020 given historical experience and management’s
evaluation of outstanding accounts receivable at the end of the period.
|
9.
|
Share-Based
Compensation
|
Share-Based
Compensation Expense
Share-based
compensation, measured at the grant date based on the fair value of the award, is typically recognized ratably over the requisite
services period, using the straight-line method of expense attribution. The Company recorded share-based compensation expense
in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands):
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Engineering services
|
|
$
|
324
|
|
|
$
|
12
|
|
General and administrative costs
|
|
|
32
|
|
|
|
9
|
|
BlueWalker 3 Satellite - construction in progress
|
|
|
14
|
|
|
|
-
|
|
Total
|
|
$
|
370
|
|
|
$
|
21
|
|
Equity
Incentive Plan
Under
the 2019 Equity Incentive Plan (“Option Plan”), the Company is authorized to issue ordinary shares, as well as options
exercisable for ordinary shares, as incentives to its employees, consultants, and members of its Board of Directors. The issuance
of share options and ordinary shares is administered by the Board of Directors using standardized share option and share subscription
agreements.
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
There
are two types of options granted under the Option Plan: (1) service-based options and (2) performance-based options. Service-based
options typically vest over a five year service period with 20% of the award vesting on the first anniversary of the employee’s
commencement date, and the balance thereafter in 48 equal monthly installments. Certain service-based options also provide for
accelerated vesting if there is a change in control or other performance condition as defined by the Option Plan. Performance-based
options typically vest on the earliest date that any of the following occurs: (i) the Company effects an initial public offering
and becomes a reporting company, (ii) the Company experiences a change of control, or (iii) other specified performance conditions.
Both service-based and performance-based options typically expire no later than 10 years from the date of grant.
As
of March 31, 2020, the Company was authorized to issue a total of 883,562 ordinary service-based and performance-based shares
under a reserve set aside for equity awards. As of March 31, 2021, there were 17,683 ordinary shares available for future issuance
and 865,039 options outstanding.
The
following table summarizes the Company’s option activity for the period ended March 31, 2021:
|
|
Options
|
|
|
Weighted-Average Exercise Price
|
|
|
Weighted-Average Remaining Contractual Term (years)
|
|
Outstanding at December 31, 2020
|
|
|
815,233
|
|
|
$
|
2.92
|
|
|
|
-
|
|
Granted
|
|
|
55,600
|
|
|
|
145.01
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Cancelled or forfeited
|
|
|
(11,600
|
)
|
|
|
2.00
|
|
|
|
-
|
|
Outstanding at March 31, 2021
|
|
|
859,233
|
|
|
$
|
12.13
|
|
|
|
2.01
|
|
Options exercisable as of March 31, 2021
|
|
|
407,109
|
|
|
$
|
1.81
|
|
|
|
1.88
|
|
Vested and expected to vest at March 31, 2021
|
|
|
859,233
|
|
|
$
|
12.13
|
|
|
|
2.01
|
|
The
Board approved the issuance of 55,600 non-statutory common share option
grants under the 2019 Equity Incentive Plan and recognized the related compensation expense over the three months ended March 31,
2021. The weighted average grant date fair value of share options granted was $145.01 per share, with an aggregate fair value of
$3.1 million for the year ended December 31, 2020. The Company recorded share-based compensation expense of $0.4 million for the three
months ended March 31, 2021, with a portion capitalized to BlueWalker 3 satellite construction-in-progress on the Consolidated Balance
Sheets.
The
following table summarizes the Company’s unvested option activity for the year ended March 31, 2021:
|
|
Number of Shares
|
|
|
Weighted-Average Grant Date Fair Value
|
|
Unvested at December 31, 2020
|
|
|
450,058
|
|
|
$
|
2.37
|
|
Granted
|
|
|
55,600
|
|
|
|
60.15
|
|
Vested
|
|
|
(47,249
|
)
|
|
|
2.92
|
|
Forfeited
|
|
|
(6,287
|
)
|
|
|
1.35
|
|
Unvested at March 31, 2021
|
|
|
452,122
|
|
|
$
|
9.43
|
|
For
the period ended March 31, 2021, total unrecognized compensation expense related to the unvested employee and director share-based
awards was $3.6 million, which is expected to be recognized over a weighted average period of 2.01 years.
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
The
Company estimates the fair value of the stock-based awards to employees and non-employees using the Black-Scholes option pricing
model, which requires the input of subjective assumptions, including (i) the expected volatility of our stock, (ii) the expected
term of the award, (iii) the risk-free interest rate, and (iv) any expected dividends. Due to the lack of company-specific historical
and implied volatility data, the Company based the estimate of expected volatility on the estimated and expected volatilities
of a representative group of publicly traded companies. For these analyses, the Company selects companies with comparable characteristics
including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient
to meet the expected life of the stock-based awards. The Company computes the historical volatility data using the daily closing
prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based
awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility
of the Company’s stock price becomes available. For awards that qualify as “plain-vanilla” options, the Company
estimates the expected life of the employee stock options using the “simplified” method, whereby, the expected life
equals the average of the vesting term and the original contractual term of the option. The expected term of stock options granted
to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference
to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected
term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect
to pay any cash dividends in the foreseeable future. The Company elects to account for forfeitures as they occur rather than apply
an estimated forfeiture rate to share based payment expense.
The
following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option pricing model to determine
the fair value of share options granted to employees and directors:
|
|
Three Months Ended
March 31, 2021
|
|
Exercise price
|
|
$
|
145.01
|
|
Fair market value
|
|
$
|
60.15
|
|
Expected dividend yield
|
|
|
0.0%
|
|
Expected term (in years)
|
|
|
6.32
|
|
Expected volatility
|
|
|
42.24%
|
|
Weighted-average risk-free rate
|
|
|
0.55%
|
|
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
The
Company presents basic net loss per share using the two-class method. The two-class method is an earnings allocation formula that
treats a participating security as having rights to earnings that otherwise would have been available to common stockholders and
that determines basic net loss per share for each class of common stock and participating security according to dividends declared
(or accumulated) and participation rights in undistributed earnings that would have been available to common stockholders. A participating
security is defined as a security that may participate in undistributed earnings with common stock. The Company’s capital
structure includes securities that participate with common stock on a one-for-one basis for distribution of dividends. These are
the Series B Preferred Stock and the Series A Preferred Stock. The Company determines the diluted net income per share by using
the more dilutive of the two-class method or the treasury stock method and by including the basic weighted average of the outstanding
preferred shares in the calculation of diluted net income per share under the two-class method and including all potential common
shares assumed issued in the calculation of diluted net income per share under the treasury stock method.
The
following table sets forth the computation of basic and diluted net loss per share:
|
|
Three Months Ended March 31,
|
|
|
|
2021
|
|
|
2020
|
|
|
|
(dollars in thousands, except per share amounts)
|
|
Numerator - basic and diluted:
|
|
|
|
|
|
|
|
|
Net loss attributable to AST & Science
|
|
$
|
(11,580
|
)
|
|
$
|
(4,407
|
)
|
Cumulative convertible preferred stock dividends
|
|
|
(2,186
|
)
|
|
|
(1,611
|
)
|
Income available to common shareholders
|
|
$
|
(13,766
|
)
|
|
$
|
(6,018
|
)
|
Denominator - basic and diluted:
|
|
|
|
|
|
|
|
|
Shares used in computing net loss per share attributable to common stockholders
|
|
|
5,500,840
|
|
|
|
5,500,000
|
|
Basic and diluted net loss per share attributable to common stockholders
|
|
$
|
(2.50
|
)
|
|
$
|
(1.09
|
)
|
For
the three months ended March 31, 2021, 3,449,959 shares of preferred stock convertible into common stock and 859,233 shares of
underlying stock options were excluded from the calculation of diluted earnings per share as their effect on the calculation would
have been anti-dilutive.
On
March 1, 2018, NanoAvionika entered into the Option Agreement with InMotion Holdings, LLC, a Delaware limited liability company
wholly-owned by AST’s Chief Executive Officer and Chairman of the Board, Abel Avellan, whereby Nano granted InMotion 2,919
option shares in connection with a Service Agreement between Nano and InMotion dated March 1, 2018 (the “Services Agreement”)
pursuant to which InMotion is to provide consulting services to Nano. The option shares vest over a three-year period and for
so long as the Service Agreement is in effect. In addition, the options shares are only exercisable upon a change of control.
For this reason, the Company has not recognized any expense related to the grant of these shares. For such consulting services,
InMotion is also entitled to receive, but has never billed to or collected from Nano a management fee totaling $15,000 per month.
On
January 20, 2020, the Company entered into the Support Services Agreement with Finser Corporation (“Finser”), which
is part of the Cisneros Group of Companies, of which a member of the Board of Directors is the Chief Executive Officer, whereby
Finser will provide the Company consulting and administrative support services. The Company incurred $0.1 million in consulting
services for the three-month period ended March 31, 2021, which were included within the general and administrative expenses on
the Consolidated Statement of Operations.
AST
& Science LLC and Subsidiaries
Notes
to Condensed Consolidated Financial Statements (Unaudited)
As
of and for the Three Months Ended March 31, 2021 and 2020
On
April 6, 2021 the Closing Date, AST completed the previously announced Business Combination pursuant to that certain Equity Purchase
Agreement, by and among AST, NPA, the existing equityholders of AST, New Providence Acquisition Management LLC, a Delaware limited liability
company (“Sponsor”), and Abel Avellan. As contemplated by the Equity Purchase Agreement (a) NPA was appointed as the managing
member of AST and AST became a subsidiary of NPA; (b) NPA changed its name to “AST SpaceMobile, Inc.”; (c) immediately prior
to the closing of the Business Combination, all then-outstanding shares of Class B common stock, par value $0.0001 per share, of NPA
(“NPA Class B Common Stock”) held by Sponsor (the “Sponsor Stock”) converted into shares of Class A common stock,
par value $0.0001 per share, of NPA (“NPA Class A Common Stock”) immediately prior to the Business Combination; (d) each
share of NPA Class A Common Stock, including those converted as described in (c) above, was converted into one share of Class A common
stock, par value $0.0001 per share, of the Company (“Class A Common Stock”), and each warrant of NPA (an “NPA Warrant”)
was converted into one warrant of the Company (a “Warrant”); (e) AST restructured its capitalization, appointed the Company
as its managing member and issued to the Company 51,729,704 units of ownership interest in AST (the “AST Common Units”),
which entitle the holder to the distributions, allocations, and other rights under the Fifth Amended and Restated Limited Liability Company
Operating Agreement of AST (the “A&R Operating Agreement”), in exchange for which AST received approximately $227.0 million
remaining in NPA’s trust account following (i) the $4.8 million payment of deferred underwriting commissions (ii) $0.2 million
of redemptions made in connection with NPA’s special meeting of stockholders relating to the transactions contemplated by the Equity
Purchase Agreement (the “Special Meeting”) and NPA’s annual meeting of stockholders to approve, among other things,
a charter amendment to extend the date by which it had to complete an initial business combination and (iii) the repayment of a $0.6
million related party loan between the Sponsor and NPA; (f) AST issued to the Company warrants to purchase up to 17,600,000 AST
Common Units; (g); certain investors (the “PIPE Investors”) purchased 23,000,000 shares of Class A Common Stock; (h) the
Company issued 51,636,922 shares of Class B common stock, par value $0.0001 per share, of the Company, which carries one vote per share
but no economic rights (“Class B Common Stock”) to the Existing AST Equityholders (other than Avellan); and (i) the Company
issued 78,163,078 shares of Class C common stock, par value $0.0001 per share, of the Company, which carries ten votes per share but
no economic rights (“Class C Common Stock”) to Avellan (the transactions referred to in clauses (a) through (i), collectively,
the “Business Combination”).
In connection with the closing of the
Business Combination, the Company incurred an additional $31.2 million of contingent transaction costs, which were paid at closing.
The Company has evaluated subsequent
events for financial statement purposes occurring through May 18, 2021, the date these financial statements were issued,
and determined that no additional subsequent events had occurred that would require recognition in these financial statements
and that all subsequent events that require disclosure have been disclosed.
Exhibit 99.5