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): March 31, 2023 |
|---|
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 March 31, 2023, AST SpaceMobile, Inc. (“AST SpaceMobile” or the “Company”) issued a press release announcing financial results for the three and twelve months ended December 31, 2022. 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 March 31, 2023 (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 2022 conference call to be held on March 31, 2023. 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 March 31, 2023 |
| 99.2 | Fourth Quarter 2022 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: | March 31, 2023 | By: | /s/ Sean R. Wallace |
| Name: Sean R. Wallace<br>Title: Chief Financial Officer |
EX-99
| PRESS RELEASE | EXHIBIT 99.1 |
|---|
AST SpaceMobile Provides Fourth Quarter and Full Year 2022 Business Update
MIDLAND, TX, March 31, 2023 – 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 agreements 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.
Investor Contact:
Scott Wisniewski
investors@ast-science.com
Media Contact:
Brandyn Bissinger
press@ast-science.com
+1 866 845 6521
Fourth Quarter and Fiscal Year 2022 Financial Results
AST SPACEMOBILE, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
| 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 |
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, | ||||||
|---|---|---|---|---|---|---|
| 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 <br>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 |
Transforming how the world connects Business Update – Fourth Quarter 2022 March 31, 2023 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 March 31, 2023. 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.
AST SpaceMobile is building the first & only space-based cellular broadband network 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
Update since our last call Currently operating the first and only satellite designed to deliver space-based cellular broadband, with the largest-ever communications array deployed commercially in low Earth orbit Testing of BlueWalker 3 to date has successfully validated key technologies to deliver cellular broadband directly to standard unmodified phones Took significant steps to further industrialize our technology, with in-house manufacturing of key components and electronics, and secured launch services for our next five satellites Continued to progress the path to commercial service with customers, partners and regulators
BlueWalker 3 in-orbit milestones The first and only in-orbit deployment of innovative satellite technology designed for cellular broadband direct to unmodified cell phones Stowed Unfolded – Antenna Side Unfolded – Solar Side View From Orbit
BlueWalker 3 test satellite update Satellite Deployment Satellite Flight Control Patented Technology End-to-End Testing Deployed the largest-ever commercial communications array in low Earth orbit Proven ability to fly and control BW3 with fully deployed array (693 sq ft) Validated our patented doppler and delay compensation Targeting to complete cellular broadband speeds direct to standard, unmodified phones Initial test results indicate downlink signal strength necessary to reach 5G cellular broadband speeds
Update on industrialization of our patented technology We continue to invest in our facilities in Texas and around the world, as we ramp up initial manufacturing and assembly lines for the Block 1 BlueBird satellites Headquarters Site 2
Progress on key commercialization milestones Continued customer momentum Signed new MOUs with seven leading mobile network operators,(1) including Saudi Telecom, Zain KSA and others Announced plans to explore potential opportunities to market services and technologies to military and law enforcement agencies Planning for the constellation Formalized the commitment with NASA to safeguard low Earth orbit with signing of Space Act Agreement Secured launch services agreement for five Block 1 BlueBird satellites on Falcon 9 and in active discussions for subsequent launches with various providers Driving U.S. regulatory framework 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 MOUs (Memoranda of Understanding) signed since November 14, 2022.
Key future milestones to reach initial space-based cellular broadband commercial service Joint test results of BlueWalker 3 capabilities with MNO customers and technology partners Manufacturing and assembly of Block 1 BlueBird satellites at our Texas facilities Completion of definitive commercial agreements with initial customers Regulatory approvals in key markets Finalization of Block 2 BlueBird design, including ASIC tape out Launch of 5 Block 1 BlueBird satellites Initial commercial service using Block 1 satellites
Fourth quarter 2022 financial metrics Adj. Operating Expenses 1 Liquidity 3 $mm $mm Non-GAAP. See the next slide 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, 2022 and September 30, 2022 was $1.3 million and $1.2 million, respectively. Stock-based compensation for the three months ended December 31, 2022 and September 30, 2022 consisted of $1.5 million and $1.3 million of engineering services expense and $0.8 million and $1.1 million of general and administrative costs, respectively. Capital expenditure as of December 31, 2022, September 30, 2022 and June 30, 2022 was $92.1 million, $92.1 million, and $86.6 million for the BlueWalker 3 satellite and $53.9 million, $43.5 million, and $37.7 million of Property and equipment, net, respectively. Cash Position as of December 31, 2022 and September 30, 2022 includes $0.7 million of restricted cash. Capital Expenditures 2 $mm +$1.2 ($1.9) +$1.3 +$0.6 +$4.6 ($0.9) ($5.5)
Appendix: Reconciliation to non-GAAP measures – adj. operating expenses Adj. operating expenses – 3 months ended Stock-based compensation for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021 consisted of $1.5 million, $1.3, and $1.0 million of engineering services expense and $0.8 million, $1.1, and $0.9 million of general and administrative costs, respectively. Stock-based compensation for the twelve months ended December 31, 2022 and 2021 consisted of $5.0 million and $2.0 million of engineering services expense and $4.4 million and $1.7 million of general and administrative costs, respectively. ($ in thousands) Dec 31, ’22 Sept 30, ’22 Dec 31, ’21 Engineering services 16,004 14,492 10,842 General and administrative costs 10,698 12,916 11,605 Research and development costs 14,651 13,543 7,949 Depreciation and amortization 1,254 1,172 864 Total operating expenses 42,607 42,123 31,260 Less: Depreciation and amortization (1,254) (1,172) (864) Less: Stock-based Compensation Expense 1 (2,295) (2,399) (1,837) Total adj. operating expenses 39,058 38,552 28,559 Adj. operating expenses – 12 months ended ($ in thousands) Dec 31, ’22 Dec 31, ’21 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 Less: Depreciation and amortization (4,711) (2,913) Less: Stock-based Compensation Expense 2 (9,391) (3,736) Total adj. operating expenses 138,773 84,939
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