8-K
AST SpaceMobile, Inc. (ASTS)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): April 01, 2024 |
|---|
AST SpaceMobile, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-39040 | 84-2027232 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| Midland Intl. Air & Space Port<br><br>2901 Enterprise Lane | ||
| Midland, Texas | 79706 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: (432) 276-3966 | ||
| --- | ||
| Not Applicable | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A common stock, par value $0.0001 per share | ASTS | The Nasdaq Stock Market LLC |
| Warrants exercisable for one share of Class A common stock at an exercise price of $11.50 | ASTSW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 1, 2024, AST SpaceMobile, Inc. (“AST SpaceMobile” or the “Company”) issued a press release announcing financial results for the three and twelve months ended December 31, 2023. A copy of the press release is attached hereto as Exhibit 99.1.
The information included in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
AST SpaceMobile is also furnishing a Fourth Quarter and Full Year Business Update, dated April 1, 2024 (the “Presentation”), attached as Exhibit 99.2 to this Current Report on Form 8-K, which may be referred to on the Company’s year end 2023 conference call to be held on April 1, 2024. The Presentation will also be available on the Company’s website at www.ast-science.com.
The information included in this Item 7.01 and in Exhibit 99.2 shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated April 1, 2024 |
| 99.2 | Fourth Quarter 2023 Business Update |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| AST SpaceMobile, Inc. | |||
|---|---|---|---|
| Date: | April 1, 2024 | By: | /s/ Sean R. Wallace |
| Name: Sean R. Wallace<br>Title: Chief Financial Officer |
EX-99.1
| PRESS RELEASE | EXHIBIT 99.1 |
|---|
AST SpaceMobile Provides Business Update and Fourth Quarter and Full Year 2023 Results
MIDLAND, TX, April 1, 2024 – AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), the company building the first and only space-based cellular broadband network accessible directly by everyday smartphones, and designed for both commercial and government applications, is providing its business update for the three months and fiscal year ended December 31, 2023.
“It has been a busy and exciting start to 2024 for AST SpaceMobile, with new partners joining our mission, manufacturing ramping, and commercialization approaching,” said Abel Avellan, Chairman and CEO of AST SpaceMobile. “With a clear vision and a strong foundation, AST SpaceMobile is well-positioned to lead the charge in bridging the digital divide.”
Business Update
• Key Investments and Commercial Agreements With AT&T, Google, Vodafone and the United States Government
o Milestone strategic financing is a vote of confidence in AST’s tech and business model
o Fixed-firm-price contract award announced with the United States Government through a prime contractor, expected to produce initial revenue in Q1 2024
o Necessary funding on-hand to execute near-term strategic plan for the launch of five 700 sq. ft. Block 1 BlueBird satellites and first next generation 2,400 sq. ft. Block 2 BlueBird satellite, which will surpass Block 1 BlueBird satellites as the largest commercial phased array in low Earth orbit
o Continue to advance discussions with additional strategic partners, following the blueprint of strategic investments alongside commercial payments
• FCC Approves Framework for the Use of Terrestrial Spectrum for SpaceMobile (Direct-to-Device)
o Potential to unlock 200+ MHz of terrestrial low band spectrum for satellite direct-to-device use
o FCC voted 5-0 on March 14 to approve the Supplemental Coverage from Space NPRM draft rules published in February
o Should facilitate AST’s FCC application to provide commercial services in the US
o We anticipate many regulatory entities globally will follow the new US regulatory regime
o Simplifies overall application process by making standard rules which cover the majority of AST’s application
• Production, Assembly and Testing Capabilities Now Fully Operational at Texas Facilities
o Continue to ramp production capability of microns, the building blocks of our Block 1 and Block 2 satellites
o Production of five 700 sq. ft. Block 1 BlueBird satellites was impacted by two suppliers, leading to delays in integration and testing; In order to accelerate production of our next satellites and reduce dependency on these suppliers, we acquired a non-exclusive and worldwide license to manufacture one of the subsystems, and replaced the supplier of the other subsystem with a new supplier with whom we have completed a new design and now own the IP
o We will now be able to manufacture in-house or through third-parties using our own IP approximately 95% of all satellite subsystems for our next generation Block 2 BlueBird satellites
• Orbital Launch Updates Provide Near-Term Timeline
o Five 700 sq. ft. Block 1 BlueBird Satellites expected to be transported from our assembly facilities to the launch site between July and August of 2024
o Secured launch contract for first 2,400 sq. ft next generation Block 2 BlueBird satellite, with a contractual launch window from December 2024 to March 2025
• Custom ASIC Enters Tape-Out Phase With TSMC, Planned to Enable Up To 120 Mbps Peak Data Rates on 40 MHz Spectrum Channels and Processing Bandwidth of Up To 10,000 MHz Per Satellite
o Novel, custom and low-power architecture developed to enable up to a tenfold improvement in processing bandwidth on each next generation 2,400 sq. ft. Block 2 BlueBird satellite
o Represents a competitive advantage developed over four years, equivalent to an estimated 150 man-years, with approximately $45.0 million of development
• Progressing Non-Dilutive Quasi-Governmental Funding Sources With Non-Binding Letters of Interest from Three Institutions
o Framework for accessing significant long-term, lower-cost non-dilutive capital
Fourth Quarter and Full Year 2023 Financial Highlights
• As of December 31, 2023, we had cash, cash equivalents and restricted cash on hand of $88.1 million. We ended the first quarter of 2024 with cash and cash equivalents and restricted cash of approximately $210.8 million. We have additional liquidity of $51.5 million in gross proceeds available to draw under the Senior Secured Credit Facility, subject to certain conditions and approvals
• Total operating expenses for the fourth quarter of 2023 were $60.9 million, including $22.3 million of depreciation and amortization and stock-based compensation expense. This represents an increase of $1.9 million as compared to $59.0 million in the third quarter of 2023, due to a $0.6 million increase in depreciation and amortization expense, a $0.5 million increase in engineering services costs, and a $1.4 million increase in research and development costs offset by a $0.5 million decrease in general and administrative costs
• Total operating expenses increased by $69.5 million to $222.4 million for the year ended December 31, 2023, as compared to $152.9 million for the year ended December 31, 2022
• Total Adjusted operating expenses for the fourth quarter of 2023 were $38.6 million, an increase of $1.3 million as compared to $37.3 million in the third quarter of 2023, due to a $1.4 million increase in research and development costs and a $0.5 million increase in Adjusted engineering services costs offset by a $0.6 million decrease in Adjusted general and administrative costs(1)
• As of December 31, 2023, we have incurred approximately $299.7 million of gross capitalized property and equipment costs and accumulated depreciation and amortization of $61.2 million. The capitalized costs include costs of our BlueWalker 3 satellite, assembly and integration facilities including assembly and test equipment, satellite materials, advance launch payments and ground antennas
(1) See reconciliation of Adjusted operating expenses to Total operating expenses, Adjusted engineering services costs to Engineering services costs and Adjusted general and administrative costs to General and administrative costs in the tables accompanying this press release.
Non-GAAP Financial Measures
We refer to certain non-GAAP financial measures in this press release, including Adjusted operating expenses, Adjusted engineering services costs and Adjusted general and administrative costs. We believe these non-GAAP financial measures are useful measures across time in evaluating our operating performance as we use these measures to manage the business, including in preparing our annual operating budget and financial projections. These non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP, and therefore have limits in their usefulness to investors. Because of the non-standardized definitions, these measures may not be comparable to the calculation of similar measures of other companies and are presented solely to provide investors with useful information to more fully understand how management assesses performance. These measures are not, and should not be viewed as, a substitute for their most directly comparable GAAP measures. Reconciliation of non-GAAP financial measures and the most directly comparable GAAP financial measures are included in the tables accompanying this press release.
Conference Call Information
AST SpaceMobile will hold a quarterly business update conference call at 5:00 p.m. (Eastern Time) on Monday, April 1, 2024. 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, and designed for both commercial and government applications. 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, X (Formerly 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 of the launch of the Block 1 Bluebird 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 and the ability to enter into commercial agreements with other parties or government entities; (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 April 1, 2024.
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 April 1, 2024. 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.
Investor Contact:
Scott Wisniewski
investors@ast-science.com
Media Contact:
Allison
Eva Murphy Ryan
917-547-7289
AstSpaceMobile@allisonpr.com
Fourth Quarter and Fiscal Year 2023 Financial Results
AST SPACEMOBILE, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
| 2022 | |||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 85,622 | $ | 238,588 | ||
| Restricted cash | 2,475 | 668 | |||
| Prepaid expenses | 4,591 | 4,100 | |||
| Other current assets | 14,194 | 24,954 | |||
| Total current assets | 106,882 | 268,310 | |||
| Non-current assets: | |||||
| Property and equipment, net | 238,478 | 145,989 | |||
| Operating lease right-of-use assets, net | 13,221 | 7,671 | |||
| Other non-current assets | 2,311 | 16,402 | |||
| TOTAL ASSETS | 360,892 | $ | 438,372 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | 20,575 | 13,929 | |||
| Accrued expenses and other current liabilities | 23,926 | 12,903 | |||
| Current operating lease liabilities | 1,468 | 722 | |||
| Current portion of long-term debt, net | 252 | 242 | |||
| Total current liabilities | 46,221 | 27,796 | |||
| Non-current liabilities: | |||||
| Warrant liabilities | 29,960 | 38,946 | |||
| Non-current operating lease liabilities | 11,900 | 7,046 | |||
| Long-term debt, net | 59,252 | 4,758 | |||
| Total liabilities | 147,333 | 78,546 | |||
| Commitments and contingencies | |||||
| Stockholders' Equity: | |||||
| Class A Common Stock, .0001 par value; 800,000,000 shares authorized; 90,161,309 and 71,819,926 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively. | 9 | 7 | |||
| Class B Common Stock, .0001 par value; 200,000,000 shares authorized; 50,041,757 shares issued and outstanding as of December 31, 2023 and December 31, 2022. | 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, 2023 and December 31, 2022. | 8 | 8 | |||
| Additional paid-in capital | 288,404 | 235,384 | |||
| Accumulated other comprehensive income | 227 | 229 | |||
| Accumulated deficit | (189,662 | ) | (102,101 | ) | |
| Noncontrolling interest | 114,568 | 226,294 | |||
| Total stockholders' equity | 213,559 | 359,826 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 360,892 | $ | 438,372 |
All values are in US Dollars.
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share data)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Revenues | $ | - | $ | 13,825 | ||
| Cost of sales (exclusive of items shown separately below) | - | 6,714 | ||||
| Gross profit | - | 7,111 | ||||
| Operating expenses: | ||||||
| Engineering services costs | 78,811 | 54,212 | ||||
| General and administrative costs | 41,601 | 48,332 | ||||
| Research and development costs | 47,486 | 45,620 | ||||
| Depreciation and amortization | 54,469 | 4,711 | ||||
| Total operating expenses | 222,367 | 152,875 | ||||
| Other income (expense): | ||||||
| Gain on remeasurement of warrant liabilities | 8,986 | 19,114 | ||||
| Interest income (expense), net | 2,675 | 2,633 | ||||
| Other (expense) income, net | (10,290 | ) | 21,521 | |||
| Total other income (expense), net | 1,371 | 43,268 | ||||
| Loss before income tax expense | (220,996 | ) | (102,496 | ) | ||
| Income tax expense | (1,681 | ) | (617 | ) | ||
| Net loss before allocation to noncontrolling interest | (222,677 | ) | (103,113 | ) | ||
| Net loss attributable to noncontrolling interest | (135,116 | ) | (71,473 | ) | ||
| Net loss attributable to common stockholders | $ | (87,561 | ) | $ | (31,640 | ) |
| Net loss per share attributable to holders of Class A Common Stock | ||||||
| Basic and diluted | $ | (1.07 | ) | $ | (0.58 | ) |
| Weighted-average shares of Class A Common Stock outstanding | ||||||
| Basic and diluted | 81,824,122 | 54,437,073 |
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands)
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Net loss before allocation to noncontrolling interest | $ | (222,677 | ) | $ | (103,113 | ) |
| Other comprehensive loss | ||||||
| Foreign currency translation adjustments | (6 | ) | (295 | ) | ||
| Total other comprehensive loss | (6 | ) | (295 | ) | ||
| Total comprehensive loss before allocation to noncontrolling interest | (222,683 | ) | (103,408 | ) | ||
| Comprehensive loss attributable to noncontrolling interest | (135,120 | ) | (71,704 | ) | ||
| Comprehensive loss attributable to common stockholders | $ | (87,563 | ) | $ | (31,704 | ) |
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except share and per share data)
| For the Three Months Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Revenues | $ | - | $ | - | ||
| Cost of sales (exclusive of items shown separately below) | - | - | ||||
| Gross profit | - | - | ||||
| Operating expenses: | ||||||
| Engineering services costs | 19,992 | 16,004 | ||||
| General and administrative costs | 10,528 | 10,698 | ||||
| Research and development costs | 10,766 | 14,651 | ||||
| Depreciation and amortization | 19,592 | 1,254 | ||||
| Total operating expenses | 60,878 | 42,607 | ||||
| Other (expense) income: | ||||||
| Gain on remeasurement of warrant liabilities | (12,468 | ) | 17,445 | |||
| Interest (expense) income, net | (1,635 | ) | 1,612 | |||
| Other expense, net | (55 | ) | (1,669 | ) | ||
| Total other (expense) income, net | (14,158 | ) | 17,388 | |||
| Loss before income tax (expense) benefit | (75,036 | ) | (25,219 | ) | ||
| Income tax (expense) benefit | (2,088 | ) | 130 | |||
| Net loss before allocation to noncontrolling interest | (77,124 | ) | (25,089 | ) | ||
| Net loss attributable to noncontrolling interest | (45,198 | ) | (16,860 | ) | ||
| Net loss attributable to common stockholders | $ | (31,926 | ) | $ | (8,229 | ) |
| Net loss per share of common stock attributable to common stockholders | ||||||
| Basic and diluted | $ | (0.35 | ) | $ | (0.14 | ) |
| Weighted average shares used in computing net loss per share of common stock | ||||||
| Basic and diluted | 90,008,459 | 60,799,275 |
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(Dollars in thousands)
| For the Three Months Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Net income loss before allocation to noncontrolling interest | $ | (77,124 | ) | $ | (25,089 | ) |
| Other comprehensive loss | ||||||
| Foreign currency translation adjustments | 520 | 1,570 | ||||
| Total other comprehensive loss | 520 | 1,570 | ||||
| Total comprehensive loss before allocation to noncontrolling interest | (76,604 | ) | (23,519 | ) | ||
| Comprehensive loss attributable to noncontrolling interest | (44,894 | ) | (15,789 | ) | ||
| Comprehensive loss attributable to common stockholders | $ | (31,710 | ) | $ | (7,730 | ) |
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
| Years Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| Cash flows from operating activities: | ||||||
| Net loss before allocation to noncontrolling interest | $ | (222,677 | ) | $ | (103,113 | ) |
| Adjustments to reconcile net loss before noncontrolling interest to cash <br>used in operating activities: | ||||||
| Gain on sale of Nano | - | (24,542 | ) | |||
| Depreciation and amortization | 54,469 | 4,711 | ||||
| Gain on remeasurement of warrant liabilities | (8,986 | ) | (19,114 | ) | ||
| Loss on sale of Property and equipment | 110 | 305 | ||||
| Amortization of debt issuance costs | 1,155 | - | ||||
| Stock-based compensation | 13,289 | 9,391 | ||||
| Issuance of common stock for commitment shares | - | 332 | ||||
| Changes in operating assets and liabilities: | - | |||||
| Accounts receivable | - | (1,993 | ) | |||
| Inventory | - | (2,461 | ) | |||
| Prepaid expenses and other current assets | 12,082 | (24,588 | ) | |||
| Accounts payable and accrued expenses | (149 | ) | 18,438 | |||
| Operating lease right-of-use assets and operating lease liabilities | 48 | 40 | ||||
| Deferred revenue | - | 2,395 | ||||
| Other assets and liabilities | 1,717 | (16,265 | ) | |||
| Net cash used in operating activities | (148,942 | ) | (156,464 | ) | ||
| Cash flows from investing activities: | ||||||
| Purchase of property and equipment and advance launch payments | (118,807 | ) | (57,284 | ) | ||
| Proceeds from sale of Nano, net of cash deconsolidated and transaction costs | - | 25,932 | ||||
| Net cash used in investing activities | (118,807 | ) | (31,352 | ) | ||
| Cash flows from financing activities: | ||||||
| Proceeds from debt | 63,500 | 230 | ||||
| Repayments of debt | (242 | ) | - | |||
| Payment for debt issuance costs | (9,653 | ) | - | |||
| Proceeds from issuance of common stock, net of issuance costs | 63,767 | 102,023 | ||||
| Issuance of equity under employee stock plan | 225 | 73 | ||||
| Employee taxes paid for stock-based compensation awards | (865 | ) | - | |||
| Proceeds from warrant exercises | - | 14 | ||||
| Net cash provided by financing activities | 116,732 | 102,340 | ||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (142 | ) | 195 | |||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (151,159 | ) | (85,281 | ) | ||
| Cash, cash equivalents and restricted cash, beginning of period | 239,256 | 324,537 | ||||
| Cash, cash equivalents and restricted cash, end of period | $ | 88,097 | $ | 239,256 | ||
| Supplemental disclosure of cash flow information: | ||||||
| Non-cash transactions: | ||||||
| Purchases of property and equipment in accounts payable and accrued expenses | $ | 18,409 | $ | 4,926 | ||
| Right-of-use assets obtained in exchange for operating lease liabilities | 6,739 | 1,129 | ||||
| Cash paid during the fiscal year for: | ||||||
| Interest | $ | 3,243 | $ | 224 | ||
| Income taxes, net | 492 | 684 |
AST SPACEMOBILE, INC.
RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED MEASURES (UNAUDITED)
(Dollars in thousands)
| For the Three Months Ended December 31, 2023 | ||||||||
|---|---|---|---|---|---|---|---|---|
| GAAP Reported | Stock-Based Compensation Expense | Adjusted | ||||||
| Engineering services costs | $ | 19,992 | $ | (1,475 | ) | $ | 18,517 | |
| General and administrative costs | 10,528 | $ | (1,219 | ) | 9,309 | |||
| Research and development costs | 10,766 | 10,766 | ||||||
| Depreciation and amortization | 19,592 | 19,592 | ||||||
| Total operating expenses | $ | 60,878 | $ | (2,694 | ) | $ | 58,184 | |
| Less: Depreciation and amortization | (19,592 | ) | ||||||
| Adjusted operating expenses | $ | 38,592 | ||||||
| For the Three Months Ended September 30, 2023 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| GAAP Reported | Stock-Based Compensation Expense | Adjusted | ||||||
| Engineering services costs | $ | 19,523 | $ | (1,507 | ) | $ | 18,016 | |
| General and administrative costs | 10,995 | (1,082 | ) | 9,913 | ||||
| Research and development costs | 9,418 | - | 9,418 | |||||
| Depreciation and amortization | 19,029 | - | 19,029 | |||||
| Total operating expenses | $ | 58,965 | $ | (2,589 | ) | $ | 56,376 | |
| Less: Depreciation and amortization | (19,029 | ) | ||||||
| Adjusted operating expenses | $ | 37,347 |
Adjusted operating expenses, Adjusted engineering services costs and Adjusted general and administrative costs are alternative financial measures used by management to evaluate our operating performance as a supplement to our most directly comparable U.S. GAAP financial measure. We define Adjusted operating expense as Total operating expenses adjusted to exclude amounts of stock-based compensation expense and depreciation and amortization expense and define Adjusted engineering services costs and Adjusted general and administrative costs as engineering services costs and general and administrative costs adjusted to exclude stock-based compensation expenses.
We believe Adjusted operating expenses, Adjusted engineering services costs and Adjusted general and administrative costs are useful measures across time in evaluating our operating performance as we use these measures to manage the business, including in preparing our annual operating budget and financial projections. Adjusted operating expenses, Adjusted engineering services costs, and Adjusted general and administrative costs are non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP, and therefore have limits in their usefulness to investors. Because of the non-standardized definitions, these measures may not be comparable to the calculation of similar measures of other companies and are presented solely to provide investors with useful information to more fully understand how management assesses performance. These measures are not, and should not be viewed as, a substitute for their most directly comparable GAAP measure of Total operating expenses, Engineering services costs and General and administrative costs.
Transforming how the world connects Business Update – Fourth Quarter 2023 April 1, 2024 NASDAQ: ASTS
ast-science.com Forward Looking Statements The information in this presentation and the oral statements made in connection therewith includes “forward-looking statements” for the purposes of federal securities laws that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact in this presentation and the oral statements made in connection therewith regarding AST SpaceMobile, Inc.’s, collectively with its subsidiaries (“SpaceMobile” or the “Company”), financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. 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 contained in AST SpaceMobile’s Annual Report on Form 10-K, filed with the SEC on April 1, 2024. The Company’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, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Use of Non-GAAP Financial Measures Adjusted operating expense is an alternative financial measure used by management to evaluate our operating performance as a supplement to our most directly comparable U.S. GAAP financial measure. We define Adjusted operating expense as Total operating expenses adjusted to exclude amounts of stock-based compensation expense and depreciation and amortization expense. We believe Adjusted operating expenses is a useful measure across time in evaluating the Company's operating performance as we use Adjusted operating expenses to manage the business, including in preparing our annual operating budget and financial projections. Adjusted operating expense is a non-GAAP financial measure that has no standardized meaning prescribed by U.S. GAAP, and therefore has limits in its usefulness to investors. Because of the non-standardized definition, it may not be comparable to the calculation of similar measures of other companies and are presented solely to provide investors with useful information to more fully understand how management assesses performance. This measure is not, and should not be viewed as, a substitute for its most directly comparable GAAP measure of Total operating expenses. Industry and Market Data This presentation includes market data and other statistical information from sources believed to be reliable, including independent industry publications, governmental publications or other published independent sources. Although AST SpaceMobile believes these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness. Trademarks and Trade Names AST SpaceMobile owns or has rights to various trademarks, service marks and trade names that they use in connection with the operation of their respective businesses. This presentation also contains trademarks, service marks and trade names of third parties, which are the property of their respective owners. The use or display of third parties’ trademarks, service marks, trade names or products in this presentation is not intended to, and does not imply, a relationship with AST SpaceMobile, or an endorsement or sponsorship by or of AST SpaceMobile. Solely for convenience, the trademarks, service marks and trade names referred to in this presentation may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that AST SpaceMobile will not assert, to the fullest extent under applicable law, their rights or the right of the applicable licensor to these trademarks, service marks and trade names.
Building the first and only space-based cellular broadband network
Key highlights Key Investments and Commercial Agreements With AT&T, Google, Vodafone and the United States Government FCC Approves Framework for the Use of Terrestrial Spectrum for SpaceMobile (Direct-to-Device) Production, Assembly and Testing Capabilities Now Fully Operational at Texas Facilities Five 700 Sq. Ft. Block 1 BlueBirds Expected To Be Transported to Launch Site Between July and August 2024 Launch Contract Secured For First 2,400 Sq. Ft. Next Generation Block 2 BlueBird With a Launch Window Between December 2024 and March 2025 Custom ASIC Enters Tape-Out Phase With TSMC, Planned to Enable Up To 120 Mbps Peak Data Rates on 40 MHz Spectrum Channels and Processing Bandwidth of Up To 10,000 MHz Per Satellite Progressing Non-Dilutive Quasi-Governmental Funding Sources With Non-Binding Letters of Interest from Three Institutions
Strategic investment from AT&T, Google and Vodafone AT&T, Google, Vodafone: $110 million of 10-year subordinated convertible notes with 5.50% annual interest (which may be paid in kind), with a conversion price of $5.75 per share AT&T: $20 million revenue commitment, payable on the launch and successful initial operation of the first 5 commercial satellites Vodafone: $25 million minimum revenue commitment, subject to a definitive agreement Vodafone, AT&T: placed purchase orders for network equipment from AST SpaceMobile to support planned commercial service, for an undisclosed amount Google: agreed to collaborate on product development, testing and implementation plans for SpaceMobile network connectivity on Android and related devices Investment from leading wireless ecosystem players is intended to support the commercial roll-out of the AST SpaceMobile network
Announced new contract award with United States Government through Prime Contractor Initial firm-fixed-priced contract, for an undisclosed amount, will be supported by ground and in-orbit system Large phased array antenna technology in space creates potential opportunities for new mission-critical capabilities in the government sector Revenue from contract to be recorded starting in Q1 2024 Many potential use cases for a large phased array antenna in low Earth orbit
Entered tape-out phase of custom ASIC with TSMC Represents a competitive advantage developed over four years, equivalent to an estimated 150 man-years, with approximately $45 million of development costs Novel, custom and low-power architecture developed to enable up to a 10x improvement in processing bandwidth, totaling 10,000 MHz, on each satellite The combination of the ASIC and our large phased array are key enablers of cellular broadband directly from space Custom ASIC, which is planned to support up to 120 Mbps peak data rates, is one key enabler of space-based cellular broadband
Key regulatory updates On March 14, the FCC voted 5-0 to approve the Supplemental Coverage from Space NPRM draft rules published in February Should facilitate AST’s FCC application to provide commercial service in the US by enabling 200+ MHz of terrestrial low-band frequencies for direct-to-device use Streamlines overall licensing process by implementing rules of general applicability which cover the majority of AST’s contemplated operations Filed updated application with the FCC to reflect a licensing jurisdiction in the US This represents a closer strategic alignment of AST’s network buildout and future network operations with the US Brazil announced an initial regulatory framework for direct-to-device Enables AST to test in Brazil with Claro (America Movil), Vivo (Telefonica) and TIM Federal Communication Commission (FCC) approves framework to regulate the use of terrestrial spectrum for SpaceMobile (direct-to-device) use
Operating and capital metrics Adj. Operating Expenses 1 Liquidity 3 $mm $mm Non-GAAP. See appendix for a reconciliation. Adjusted operating expenses is equal to total operating expense less non-cash operating expense such as depreciation and amortization and stock based-compensation expense. Depreciation and amortization for the three months ended December 31, 2023 and September 30, 2023 was $19.6 million and $19.0 million, respectively. Stock-based compensation for the three months ended December 31, 2023 and September 30, 2023 consisted of $1.5 million and $1.5 million of engineering services expense and $1.2 million and $1.1 million of general and administrative costs, respectively. Amounts depicted in chart represent gross property and equipment costs. $71.7 million and $33.9 million of gross property and equipment costs during the third and fourth quarters of 2023, respectively, disclosed herein include advance launch payments reclassified to property and equipment during the third and fourth quarters of 2023, respectively. Gross property and equipment as of December 31, 2023, September 30, 2023, and December 31, 2022 was $299.7 million, $265.8 million, and $153.0 million, respectively. Accumulated depreciation as of December 31, 2023, September 30, 2023, and December 31, 2022 was $61.2 million, $41.6 million, and $7.0 million, respectively. Cash Position as of March 31, 2024 and September 30, 2023 includes $2.5 million and $2.4 million of restricted cash, respectively. Cash position as of December 31, 2023 was $88.1 million, including $2.5 million of restricted cash. Capital Expenditures 2 $mm $210.8 Additional liquidity of $51.5 million in gross proceeds available to draw under the Senior Secured Credit Facility, subject to certain conditions and approvals $51.5 $135.7
Update on further funding plans Process for lower-cost, non-dilutive funding has been initiated Letters demonstrate that AST’s network is the type of project that these institutions are looking to finance Continue to believe that export credit agencies and other quasi-governmental institutions globally represent an effective way to secure significant long-term capital at reasonable rates There can be no assurance that we will be successful in the pursuit of this type of funding Received Three Non-Binding Letters of Interest for Non-Dilutive Quasi-Governmental Funding
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Appendix
Reconciliation to non-GAAP measures – adj. operating expenses Adj. operating expenses – 3 months ended ($ in thousands) Dec 31, ’23 Sept 30, ’23 Dec 31, ’22 Engineering services 19,992 19,523 16,004 General and administrative costs 10,528 10,995 10,698 Research and development costs 10,766 9,418 14,651 Depreciation and amortization 19,592 19,029 1,254 Total operating expenses 60,878 58,965 42,607 Less: Depreciation and amortization (19,592) (19,029) (1,254) Less: Stock-based compensation expense 1 (2,694) (2,589) (2,295) Total adj. operating expenses 38,592 37,347 39,058 Adj. operating expenses – 12 months ended ($ in thousands) Dec 31, ’23 Dec 31, ’22 Engineering services 78,811 54,212 General and administrative costs 41,601 48,332 Research and development costs 47,486 45,620 Depreciation and amortization 54,469 4,711 Total operating expenses 222,367 152,875 Less: Depreciation and amortization (54,469) (4,711) Less: Stock-based compensation expense 2 (13,289) (9,391) Total adj. operating expenses 154,609 138,773 Stock-based compensation for the three months ended December 31, 2023, September 30, 2023, and December 31, 2022 consisted of $1.5 million, $1.5 million, and $1.5 million of engineering services expense and $1.2 million, $1.1 million, and $0.8 million of general and administrative costs, respectively. Stock-based compensation for the twelve months ended December 31, 2023 and 2022 consisted of $8.8 million and $5.0 million of engineering services expense and $4.5 million and $4.4 million of general and administrative costs, respectively.