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, is providing its business update for the three months and fiscal year ended December 31, 2022.

“The testing to date for BlueWalker 3 continues to validate the design roadmap for our BlueBird commercial satellites,” said Abel Avellan, Chairman and Chief Executive Officer of AST SpaceMobile. “As we plan for the commercialization of our service, we are ramping the manufacturing of our Block 1 satellites and making key investments for Block 2 satellites.”

Business Update

Update on BlueWalker 3 Activities

• Deployed the largest-ever commercial communications array in low Earth orbit
• Proven ability to fly and control the fully deployed communications array measuring 693 sq ft
• Testing has validated our architecture’s patented doppler and delay compensation
• Initial test results indicate downlink signal strength necessary to reach 5G cellular broadband speeds

Update on Block 1 BlueBird Program

• Plan to launch five Block 1 BlueBird satellites in Q1 2024, expected to provide initial, non-continuous space-based cellular broadband services in select markets using low-band frequencies
• Took significant steps to further industrialize our technology, with in-house manufacturing of key components and electronics
• Secured launch services agreement for five Block 1 BlueBird satellites on a Falcon 9 and in active discussions for subsequent launches for Block 2 BlueBird satellites with various providers

Commercialization and Regulatory Progress

• Signed new MOUs (memoranda of understanding) with seven leading mobile network operators since November 14, 2022, including Zain KSA, Saudi Telecom, and others
• Announced plans to explore potential opportunities to jointly market services and technologies to military and law enforcement agencies with Fairwinds Technologies, a leading integrator for defense and civilian agencies around the world
• Participated in initial FCC rulemaking related to Supplemental Coverage from Space, which would allow satellite operators to collaborate with terrestrial service providers to expand coverage to terrestrial licensee subscribers
• Formalized the commitment with NASA to share information to help safeguard low Earth Orbit, with the signing of a Space Act Agreement

Fourth Quarter 2022 and Full Year 2022 Financial Highlights

• Ended the fourth quarter with cash, cash equivalents, and restricted cash of $239.3 million
• Total operating expenses increased by $0.5 million to $42.6 million for the fourth quarter of 2022, as compared to $42.1 million in the third quarter of 2022, due to a $1.1 million increase in research and development costs and $1.5 million increase in engineering services, offset by a $2.1 million decrease in general and administrative costs
• Total operating expenses increased by $61.3 million to $152.9 million for the year ended December 31, 2022, as compared to $91.6 million for the year ended December 31, 2021
• As of December 31, 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 December 31, 2022, the Company incurred approximately $53.9 million of capitalized property and equipment costs related to development of assembly, integration, and test facilities in Texas, and purchase of satellite assembly equipment, satellite direct materials and satellite antennas
• Completed the sale of 51% interest in NanoAvionika UAB ("Nano") for net proceeds of $26.6 million in September 2022
• Issued shares of Class A common stock under various equity programs and offerings for net proceeds of $102.0 million during the year ended December 31, 2022

Conference Call Information

AST SpaceMobile will hold a quarterly business update conference call at 8:00 a.m. (Eastern Time) on Friday, March 31, 2023. 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, 2023.

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, 2023. 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.

Fourth Quarter and Fiscal Year 2022 Financial Results

AST SPACEMOBILE, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

 

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

238,588

 

 

$

321,787

 

Restricted cash

 

 

668

 

 

 

2,750

 

Accounts receivable

 

 

-

 

 

 

2,173

 

Inventories

 

 

-

 

 

 

1,412

 

Prepaid expenses

 

 

4,100

 

 

 

2,831

 

Other current assets

 

 

24,954

 

 

 

4,850

 

Total current assets

 

 

268,310

 

 

 

335,803

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

BlueWalker 3 satellite - construction in progress

 

 

92,077

 

 

 

67,615

 

Property and equipment, net

 

 

53,912

 

 

 

28,327

 

Total property and equipment, net

 

 

145,989

 

 

 

95,942

 

 

 

 

 

 

 

 

Other non-current assets:

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

 

7,671

 

 

 

7,991

 

Goodwill

 

 

-

 

 

 

3,641

 

Other non-current assets

 

 

16,402

 

 

 

559

 

Total other non-current assets

 

 

24,073

 

 

 

12,191

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

438,372

 

 

$

443,936

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

13,929

 

 

$

6,638

 

Accrued expenses and other current liabilities

 

 

13,145

 

 

 

7,469

 

Deferred revenue

 

 

-

 

 

 

6,636

 

Current operating lease liabilities

 

 

722

 

 

 

634

 

Total current liabilities

 

 

27,796

 

 

 

21,377

 

 

 

 

 

 

 

 

Warrant liabilities

 

 

38,946

 

 

 

58,062

 

Non-current operating lease liabilities

 

 

7,046

 

 

 

7,525

 

Long-term debt

 

 

4,758

 

 

 

5,000

 

Total liabilities

 

 

78,546

 

 

 

91,964

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Class A Common Stock, $.0001 par value, 800,000,000 shares authorized, 71,819,926 and 51,730,904 shares issued and outstanding as of December 31, 2022 and 2021, respectively.

 

 

7

 

 

 

5

 

Class B Common Stock, $.0001 par value, 200,000,000 shares authorized, 50,041,757 and 51,636,922 shares issued and outstanding as of December 31, 2022 and 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 December 31, 2022 and 2021, respectively.

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

235,384

 

 

 

171,155

 

Accumulated other comprehensive income (loss)

 

 

229

 

 

 

(433

)

Accumulated deficit

 

 

(102,101

)

 

 

(70,461

)

Noncontrolling interest

 

 

226,294

 

 

 

251,693

 

Total stockholders' equity

 

 

359,826

 

 

 

351,972

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

438,372

 

 

$

443,936

 

 

AST SPACEMOBILE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Revenues

 

$

13,825

 

 

$

12,405

 

 

 

 

 

 

 

 

Cost of sales (exclusive of items shown separately below)

 

 

6,714

 

 

 

7,563

 

 

 

 

 

 

 

 

Gross profit

 

 

7,111

 

 

 

4,842

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Engineering services

 

 

54,212

 

 

 

29,599

 

General and administrative costs

 

 

48,332

 

 

 

35,636

 

Research and development costs

 

 

45,620

 

 

 

23,440

 

Depreciation and amortization

 

 

4,711

 

 

 

2,913

 

Total operating expenses

 

 

152,875

 

 

 

91,588

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

Gain on remeasurement of warrant liabilities

 

 

19,114

 

 

 

15,766

 

Other income (expense), net

 

 

24,154

 

 

 

(1,950

)

Total other income, net

 

 

43,268

 

 

 

13,816

 

 

 

 

 

 

 

 

Loss before income tax expense

 

 

(102,496

)

 

 

(72,930

)

Income tax expense

 

 

617

 

 

 

331

 

Net loss before allocation to noncontrolling interest

 

 

(103,113

)

 

 

(73,261

)

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

(71,473

)

 

 

(42,708

)

Net loss attributable to common stockholders

 

$

(31,640

)

 

$

(30,553

)

Net loss per share attributable to holders of Class A Common Stock (1)

 

 

 

 

 

 

Basic and diluted

 

$

(0.58

)

 

$

(0.37

)

Weighted average shares of Class A Common Stock outstanding (1)

 

 

 

 

 

 

Basic and diluted

 

 

54,437,073

 

 

 

51,729,785

 

(1)

Net loss per share information for the year ended December 31, 2021 did not include the loss prior to the date of Business Combination.

AST SPACEMOBILE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in thousands)

 

 

 

Year Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Net loss before allocation to noncontrolling interest

 

$

(103,113

)

 

$

(73,261

)

Other comprehensive loss

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(295

)

 

 

(666

)

Total other comprehensive loss

 

 

(295

)

 

 

(666

)

Total comprehensive loss before allocation to noncontrolling interest

 

 

(103,408

)

 

 

(73,927

)

Comprehensive loss attributable to noncontrolling interest

 

 

(71,704

)

 

 

(43,109

)

Comprehensive loss attributable to common stockholders

 

$

(31,704

)

 

$

(30,818

)

 

AST SPACEMOBILE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

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

 

 

 

For the Three Months Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Revenues

 

$

-

 

 

$

6,220

 

 

 

 

 

 

 

 

Cost of sales (exclusive of items shown separately below)

 

 

-

 

 

 

3,441

 

 

 

 

 

 

 

 

Gross profit

 

 

-

 

 

 

2,779

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Engineering services

 

 

16,004

 

 

 

10,842

 

General and administrative costs

 

 

10,698

 

 

 

11,605

 

Research and development costs

 

 

14,651

 

 

 

7,949

 

Depreciation and amortization

 

 

1,254

 

 

 

864

 

Total operating expenses

 

 

42,607

 

 

 

31,260

 

 

 

 

 

 

 

 

Other income:

 

 

 

 

 

 

Gain on remeasurement of warrant liabilities

 

 

17,445

 

 

 

18,042

 

Other expense, net

 

 

(57

)

 

 

(2,106

)

Total other income, net

 

 

17,388

 

 

 

15,936

 

 

 

 

 

 

 

 

Loss before income tax expense

 

 

(25,219

)

 

 

(12,545

)

Income tax (benefit) expense

 

 

(130

)

 

 

258

 

Net loss before allocation to noncontrolling interest

 

 

(25,089

)

 

 

(12,803

)

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

(16,860

)

 

 

(9,693

)

Net loss attributable to common stockholders

 

$

(8,229

)

 

$

(3,110

)

Net loss per share attributable to holders of Class A Common Stock

 

 

 

 

 

 

Basic and diluted

 

$

(0.14

)

 

$

(0.06

)

Weighted average shares of Class A Common Stock outstanding

 

 

 

 

 

 

Basic and diluted

 

 

60,799,275

 

 

 

51,729,943

 

 

AST SPACEMOBILE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(Dollars in thousands)

 

 

 

For the Three Months Ended December 31,

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

Net loss before allocation to noncontrolling interest

 

$

(25,089

)

 

$

(12,803

)

Other comprehensive income (loss)

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

1,570

 

 

 

(172

)

Total other comprehensive income (loss)

 

 

1,570

 

 

 

(172

)

Total comprehensive loss before allocation to noncontrolling interest

 

 

(23,519

)

 

 

(12,975

)

Comprehensive loss attributable to noncontrolling interest

 

 

(15,789

)

 

 

(9,826

)

Comprehensive loss attributable to common stockholders

 

$

(7,730

)

 

$

(3,149

)

 

AST SPACEMOBILE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

 

 

Years Ended December 31,

 

 

2022

 

 

2021

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

Net loss before allocation to noncontrolling interest

$

(103,113

)

 

$

(73,261

)

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

 

 

 

 

 

Gain on sale of interest in NanoAvionika UAB

 

(24,542

)

 

 

-

 

Depreciation and amortization

 

4,711

 

 

 

2,913

 

Gain on remeasurement of warrant liabilities

 

(19,114

)

 

 

(15,766

)

Loss on sale of Property and equipment

 

305

 

 

 

-

 

Non-cash lease expense

 

720

 

 

 

574

 

Stock-based compensation

 

9,391

 

 

 

3,736

 

Issuance of common stock for commitment shares

 

332

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(1,993

)

 

 

(220

)

Prepaid expenses and other current assets

 

(24,588

)

 

 

(4,216

)

Inventory

 

(2,461

)

 

 

1,039

 

Accounts payable and accrued expenses

 

18,438

 

 

 

2,091

 

Operating lease liabilities

 

(680

)

 

 

(398

)

Deferred revenue

 

2,395

 

 

 

3,572

 

Other assets and liabilities

 

(16,265

)

 

 

(159

)

Net cash used in operating activities

 

(156,464

)

 

 

(80,095

)

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of property and equipment

 

(30,317

)

 

 

(15,080

)

BlueWalker 3 satellite - construction in process

 

(26,967

)

 

 

(39,712

)

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

 

25,932

 

 

 

-

 

Net cash used in investing activities

 

(31,352

)

 

 

(54,792

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from issuance of common stock

 

102,023

 

 

 

-

 

Proceeds from Business Combination

 

-

 

 

 

456,420

 

Direct costs incurred for the Business Combination

 

-

 

 

 

(39,542

)

Issuance of incentive equity units under employee stock plan

 

73

 

 

 

-

 

Proceeds from warrant exercises

 

14

 

 

 

14

 

Proceeds from debt

 

230

 

 

 

49

 

Net cash provided by financing activities

 

102,340

 

 

 

416,941

 

 

 

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

195

 

 

 

(294

)

 

 

 

 

 

 

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

 

(85,281

)

 

 

281,760

 

Cash, cash equivalents and restricted cash, beginning of period

 

324,537

 

 

 

42,777

 

Cash, cash equivalents and restricted cash, end of period

$

239,256

 

 

$

324,537

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

Purchases of construction in process in accounts payable and accrued expenses

$

4,670

 

 

$

3,265

 

Purchases of property and equipment in accounts payable and accrued expenses

 

256

 

 

 

1,429

 

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

 

1,129

 

 

 

1,557

 

Purchases of property and equipment using proceeds from long-term debt

 

-

 

 

 

5,000

 

Cash paid during the fiscal year for:

 

 

 

 

 

Interest

$

224

 

 

$

13

 

Income taxes, net

 

684

 

 

 

186

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230330005877/en/

Investors: Scott Wisniewski investors@ast-science.com

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