ASTS

AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), the company building the first and only space-based cellular broadband network accessible directly by standard mobile phones, today is providing its business update for the third quarter ended September 30, 2022.

“The successful unfolding of BlueWalker 3 is a major step forward for our patented space-based cellular broadband technology and paves the way for the ongoing production of our BlueBird satellites,” said Abel Avellan, Chairman and Chief Executive Officer of AST SpaceMobile. “In completing this deployment, as well as the other learnings from stowing, launching, operating, testing and flying the satellite over the last 2 months, we feel confident in our architecture and do not foresee any major changes to the architecture of our Block 1 satellites.”

Business Update

Progress with our BlueWalker 3 test satellite

• Completed the successful launch of the BlueWalker 3 (“BW3”) test satellite from Cape Canaveral, FL
• Acquired control of the BlueWalker 3 test satellite shortly after deployment and implemented Telemetry, Tracking and Control protocols for operations control of the satellite
• Successfully unfolded the largest communications array ever deployed on a commercial Low Earth Orbit satellite
• Completed validation of key aspects of our satellite architecture after two months of in-orbit operation

Industrialization of our SpaceMobile constellation

• Plan to launch five Block 1 BlueBird satellites in late 2023
• Continued to ramp up the assembly, testing and implementation processes at our Site 2 facility in Midland to build five Block 1 BlueBird satellites
• Grew portfolio of patent and patent pending claims to more than 2,600 worldwide as of November 14, 2022 compared to the 2,400 discussed at our last earnings call

Third Quarter 2022 Financial Highlights

• Ended the third quarter with cash, cash equivalents, and restricted cash of $199.5 million
• Total operating expenses increased by $6.7 million to $42.1 million for the third quarter of 2022, as compared to $35.4 million in the second quarter of 2022, due to a $4.4 million increase in research and development costs and $2.5 million increase in engineering services offset by a $0.2 million decrease in general and administrative costs
• As of September 30, 2022, the Company incurred $92.1 million of capitalized costs (including launch costs and non-recurring engineering costs) related to the assembly, testing and deployment of the BlueWalker 3 test satellite
• As of September 30, 2022, the Company incurred approximately $43.5 million of capitalized property and equipment costs primarily related to the Texas facilities, satellite antennas, satellite parts assembly and test equipment, and leasehold improvements
• Completed the sale of 51% interest in NanoAvionika UAB ("Nano") for net proceeds of $26.7 million
• Issued shares of Class A common stock under the Common Stock Purchase Agreement and Equity Distribution Agreement for net proceeds of $17.0 million

Conference Call Information

AST SpaceMobile will hold a quarterly business update conference call at 5:00 p.m. (Eastern Time) today, November 14, 2022. The call will be accessible via a live webcast on the Events page of AST SpaceMobile’s Investor Relations website at https://ast-science.com/investors/. An archive of the webcast will be available shortly after the call.

About AST SpaceMobile

AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with standard, unmodified mobile devices based on our extensive IP and patent portfolio. Our engineers and space scientists are on a mission to eliminate the connectivity gaps faced by today’s five billion mobile subscribers and finally bring broadband to the billions who remain unconnected. For more information, follow AST SpaceMobile on YouTube, Twitter, LinkedIn and Facebook. Watch this video for an overview of the SpaceMobile mission.

Forward-Looking Statements

This communication contains “forward-looking statements” that are not historical facts, and involve risks and uncertainties that could cause actual results of AST SpaceMobile to differ materially from those expected and projected. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “would,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology.

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 AST SpaceMobile’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (i) expectations regarding AST SpaceMobile’s strategies and future financial performance, including AST’s future business plans or objectives, expected functionality of the SpaceMobile Service, anticipated timing and level of deployment of satellites, anticipated demand and acceptance of mobile satellite services, prospective performance and commercial opportunities and competitors, the timing of obtaining regulatory approvals, ability to finance its research and development activities, commercial partnership acquisition and retention, products and services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash, capital expenditures, and AST’s ability to invest in growth initiatives; (ii) the negotiation of definitive agreements with mobile network operators relating to the SpaceMobile service that would supersede preliminary agreements and memoranda of understanding; (iii) the ability of AST SpaceMobile to grow and manage growth profitably and retain its key employees and AST SpaceMobile’s responses to actions of its competitors and its ability to effectively compete; (iv) changes in applicable laws or regulations; (v) the possibility that AST SpaceMobile may be adversely affected by other economic, business, and/or competitive factors; (vi) the outcome of any legal proceedings that may be instituted against AST SpaceMobile; and (vii) other risks and uncertainties indicated in the Company’s filings with the SEC, including those in the Risk Factors section of AST SpaceMobile’s Form 10-K filed with the SEC on March 31, 2022.

The planned testing of the BW3 test satellite may not be completed due to a variety of factors, which could include loss of satellite connectivity, destruction of the satellite, or other communication failures, and even if completed as planned, the BW3 testing may indicate adjustments that are needed or modifications that must be made, any of which could result in additional costs, which could be material, and delays in commercializing our service. If there are delays or issues with our testing, it may become more costly to raise capital, if we are able to do so at all.

AST SpaceMobile cautions that the foregoing list of factors is not exclusive. AST SpaceMobile cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors incorporated by reference into AST SpaceMobile’s Form 10-K filed with the SEC on March 31, 2022. AST SpaceMobile’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, AST SpaceMobile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

AST SPACEMOBILE, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

 

December 31, 2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

198,869

 

 

$

321,787

 

Restricted cash (1)

 

 

660

 

 

 

2,750

 

Accounts receivable

 

 

-

 

 

 

2,173

 

Inventories

 

 

-

 

 

 

1,412

 

Prepaid expenses

 

 

5,650

 

 

 

2,831

 

Other current assets

 

 

20,127

 

 

 

4,850

 

Total current assets

 

 

225,306

 

 

 

335,803

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

BlueWalker 3 satellite - construction in progress

 

 

92,094

 

 

 

67,615

 

Property and equipment, net

 

 

43,543

 

 

 

28,327

 

Total property and equipment, net

 

 

135,637

 

 

 

95,942

 

 

 

 

 

 

 

 

Other non-current assets:

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

 

7,901

 

 

 

7,991

 

Goodwill

 

 

-

 

 

 

3,641

 

Other non-current assets

 

 

17,424

 

 

 

559

 

Total other non-current assets

 

 

25,325

 

 

 

12,191

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

386,268

 

 

$

443,936

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,546

 

 

$

6,638

 

Accrued expenses and other current liabilities

 

 

10,837

 

 

 

7,469

 

Deferred revenue

 

 

-

 

 

 

6,636

 

Current operating lease liabilities

 

 

803

 

 

 

634

 

Total current liabilities

 

 

21,186

 

 

 

21,377

 

 

 

 

 

 

 

 

Warrant liabilities

 

 

56,390

 

 

 

58,062

 

Non-current operating lease liabilities

 

 

7,195

 

 

 

7,525

 

Long-term debt

 

 

4,820

 

 

 

5,000

 

Total liabilities

 

 

89,591

 

 

 

91,964

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Class A Common Stock, $.0001 par value; 800,000,000 shares authorized; 54,369,296 and 51,730,904 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.

 

 

5

 

 

 

5

 

Class B Common Stock, $.0001 par value; 200,000,000 shares authorized; 51,636,922 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.

 

 

5

 

 

 

5

 

Class C Common Stock, $.0001 par value; 125,000,000 shares authorized; 78,163,078 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively.

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

185,435

 

 

 

171,155

 

Accumulated other comprehensive loss

 

 

(271

)

 

 

(433

)

Accumulated deficit

 

 

(93,872

)

 

 

(70,461

)

Noncontrolling interest

 

 

205,367

 

 

 

251,693

 

Total stockholders' equity

 

 

296,677

 

 

 

351,972

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

386,268

 

 

$

443,936

 

(1)

As of September 30, 2022, restricted cash of $0.7 million represents deposits against the bank guaranty issued to the landlord for lease of a property. As of December 31, 2021, restricted cash of $2.8 million represented deposits with a bank to exclusively use for capital improvements at the Company’s facility in Texas, United States.

AST SPACEMOBILE, INC.

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

(dollars in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

 

 

For the Nine Months Ended September 30,

 

 

 

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

4,168

 

 

$

2,450

 

 

 

$

13,825

 

 

$

6,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (exclusive of items shown separately below)

 

 

2,525

 

 

 

2,103

 

 

 

 

6,714

 

 

 

4,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

1,643

 

 

 

347

 

 

 

 

7,111

 

 

 

2,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering services

 

 

14,492

 

 

 

8,026

 

 

 

 

38,208

 

 

 

18,757

 

 

General and administrative costs

 

 

12,916

 

 

 

9,331

 

 

 

 

37,634

 

 

 

24,031

 

 

Research and development costs

 

 

13,543

 

 

 

4,888

 

 

 

 

30,969

 

 

 

15,491

 

 

Depreciation and amortization

 

 

1,172

 

 

 

867

 

 

 

 

3,457

 

 

 

2,049

 

 

Total operating expenses

 

 

42,123

 

 

 

23,112

 

 

 

 

110,268

 

 

 

60,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) gain on remeasurement of warrant liabilities

 

 

(15,897

)

 

 

39,401

 

 

 

 

1,669

 

 

 

(2,276

)

 

Other income, net

 

 

24,875

 

 

 

184

 

 

 

 

24,211

 

 

 

156

 

 

Total other income (expense), net

 

 

8,978

 

 

 

39,585

 

 

 

 

25,880

 

 

 

(2,120

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income tax expense

 

 

(31,502

)

 

 

16,820

 

 

 

 

(77,277

)

 

 

(60,385

)

 

Income tax expense

 

 

550

 

 

 

16

 

 

 

 

747

 

 

 

73

 

 

Net (loss) income before allocation to noncontrolling interest

 

 

(32,052

)

 

 

16,804

 

 

 

 

(78,024

)

 

 

(60,458

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to noncontrolling interest

 

 

(22,286

)

 

 

12,689

 

 

 

 

(54,613

)

 

 

(33,015

)

 

Net (loss) income attributable to common stockholders

 

$

(9,766

)

 

$

4,115

 

 

 

$

(23,411

)

 

$

(27,443

)

 

Net (loss) income per share of common stock attributable to common stockholders (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.18

)

 

$

0.08

 

 

 

$

(0.45

)

 

$

(0.31

)

 

Diluted

 

$

(0.18

)

 

$

0.07

 

 

 

$

(0.45

)

 

$

(0.31

)

 

Weighted average shares used in computing net (loss) income per share of common stock (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

53,233,552

 

 

 

51,729,704

 

 

 

 

52,292,972

 

 

 

51,729,704

 

 

Diluted

 

 

53,233,552

 

 

 

51,839,841

 

 

 

 

52,292,972

 

 

 

51,729,704

 

 

 

(1)

Earnings per share information excludes earnings for the periods prior to the Business Combination, as it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements.

AST SPACEMOBILE, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss before allocation to noncontrolling interest

 

$

(32,052

)

 

$

16,804

 

 

$

(78,024

)

 

$

(60,458

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(1,267

)

 

 

(220

)

 

 

(1,865

)

 

 

(494

)

Total other comprehensive loss

 

 

(1,267

)

 

 

(220

)

 

 

(1,865

)

 

 

(494

)

Total comprehensive loss before allocation to noncontrolling interest

 

 

(33,319

)

 

 

16,584

 

 

 

(79,889

)

 

 

(60,952

)

Comprehensive loss attributable to noncontrolling interest

 

 

(23,083

)

 

 

12,490

 

 

 

(55,915

)

 

 

(33,283

)

Comprehensive loss attributable to common stockholders

 

$

(10,236

)

 

$

4,094

 

 

$

(23,974

)

 

$

(27,669

)

 

AST SPACEMOBILE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

 

 

 

 

For the Nine Months Ended September 30,

 

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Net loss before allocation to noncontrolling interest

 

 

$

(78,024

)

 

$

(60,458

)

Adjustments to reconcile net loss before noncontrolling interest to cash used in operating activities:

 

 

 

 

 

 

 

Gain on sale of Nano

 

 

 

(24,646

)

 

 

-

 

Depreciation and amortization

 

 

 

3,457

 

 

 

2,049

 

(Gain) loss on remeasurement of warrant liabilities

 

 

 

(1,669

)

 

 

2,276

 

Non-cash lease expense

 

 

 

364

 

 

 

505

 

Stock-based compensation

 

 

 

7,093

 

 

 

1,899

 

Issuance of common stock for commitment shares

 

 

 

332

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

 

 

(2,241

)

 

 

710

 

Prepaid expenses and other current assets

 

 

 

(20,444

)

 

 

(2,700

)

Inventory

 

 

 

(2,461

)

 

 

(282

)

Accounts payable and accrued expenses

 

 

 

12,259

 

 

 

(1,069

)

Operating lease liabilities

 

 

 

(323

)

 

 

(354

)

Deferred revenue

 

 

 

2,395

 

 

 

1,662

 

Other assets and liabilities

 

 

 

(17,516

)

 

 

(2,850

)

Net cash used in operating activities

 

 

 

(121,424

)

 

 

(58,612

)

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

 

(20,685

)

 

 

(11,293

)

BlueWalker 3 satellite - construction in process

 

 

 

(25,165

)

 

 

(29,201

)

Proceeds from sale of Nano, net of cash deconsolidated and transaction costs

 

 

 

26,036

 

 

 

-

 

Net cash used in investing activities

 

 

 

(19,814

)

 

 

(40,494

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

 

 

16,994

 

 

 

-

 

Proceeds from business combination

 

 

 

-

 

 

 

456,420

 

Direct and incremental costs incurred for the Business Combination

 

 

 

-

 

 

 

(39,542

)

Issuance of incentive units under employee stock plan

 

 

 

60

 

 

 

 

Warrant exercises

 

 

 

14

 

 

 

-

 

Proceeds from debt

 

 

 

230

 

 

 

-

 

Net cash provided by financing activities

 

 

 

17,298

 

 

 

416,878

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

 

(1,068

)

 

 

(159

)

 

 

 

 

 

 

 

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

 

(125,008

)

 

 

317,613

 

Cash, cash equivalents and restricted cash, beginning of period

 

 

 

324,537

 

 

 

42,777

 

Cash, cash equivalents and restricted cash, end of period

 

 

$

199,529

 

 

$

360,390

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

 

Purchases of construction in process in accounts payable

 

 

$

3,966

 

 

$

2,266

 

Purchases of property and equipment in accounts payable

 

 

 

755

 

 

 

1,306

 

Right-of-use assets obtained in exchange for operating lease liabilities

 

 

 

1,129

 

 

 

-

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221114006023/en/

Investor Contact: Scott Wisniewski investors@ast-science.com

Media Contact: Brandyn Bissinger press@ast-science.com +1 866 845 6521