AST SpaceMobile Provides Fourth Quarter and Full Year 2021 Business Update

MIDLAND, Texas–()–AST SpaceMobile, Inc. (“AST SpaceMobile”) (NASDAQ: ASTS), the company building the first and only space-based cellular broadband network accessible directly by standard mobile phones, today is providing its business update for the fourth quarter and fiscal year ended December 31, 2021.

“Since our last quarterly business update, our global team has worked diligently to substantially complete the assembly of, and critical testing milestones related to our next satellite, BlueWalker 3. The satellite is on schedule for our planned summer launch and all testing and integration are near completion,” said Abel Avellan, Chairman and CEO of AST SpaceMobile.

Mr. Avellan added, “In our first year as a public company, we have achieved important technical milestones to position ourselves for the planned launch of BlueWalker 3, which will bring to a close our initial development phase. In parallel, we’ve advanced our production spacecraft design and procurement, made facility and human capital investments to support high-volume manufacturing capabilities, and furthered our relationships with mobile network operators around the globe.”

Business Highlights Through March 31, 2022

  • Substantially completed the assembly of, and critical testing milestones for BlueWalker 3 in advance of its planned summer launch
  • Completed the purchase of a 100,000 square feet extension facility in Texas, to support our commercial satellite manufacturing capabilities
  • Completed the first phase of renovations on the extension facility and earmarked approximately $20.0 million of additional investment
  • Established new technology hub in Maryland to support Systems Engineering, Network Operations Center (“NOC”) and Satellite Operations Center (“SOC”)
  • Increased to more than 1.8 billion the number of subscribers represented by mobile network operators who have agreements and memoranda of understanding with AST SpaceMobile as of March 31, 2022, compared to 1.5 billion at November 15, 2021
  • Signed a non-binding memorandum of understanding with Orange S.A., one of the world’s leading telecommunications operators serving more than 220 million mobile customers across the globe
  • Growth of 30 employees across all offices in the fourth quarter of 2021, with a team of 566 as of December 31, 2021, including 386 full-time employees and consultants and 180 employees of 3rd party engineering service providers working on AST SpaceMobile
  • Grew portfolio of patent- and patent-pending claims to more than 2,100 worldwide as of March 31, 2022
  • Signed a multi-launch agreement, covering the planned summer launch of BW3 and the launch of the first BlueBird satellite, and providing a framework for future launches, and paid $22.75 million in the first quarter of 2022 in connection therewith

Fourth Quarter and Full Year 2021 Financial Highlights

  • Ended the fourth quarter with cash, cash equivalents, and restricted cash of $324.5 million and $5.0 million of debt as of December 31, 2021, incurred in connection with the purchase of the new Texas facility
  • Total operating expenses increased by $64.3 million to $91.6 million for the year ended December 31, 2021, as compared to $27.3 million for the year ended December 31, 2020. Operating expenses for the fiscal year ended December 31, 2020 and for the period from January 1, 2021 up to April 6, 2021, the date of the Business Combination, are of the accounting predecessor, AST LLC. After the Business Combination, upon obtaining additional funding of $416.9 million, the Company significantly expanded its operations and research and development initiatives, made significant progress on the BW3 test satellite and design of the BB satellites, and increased the headcount of employees and consultants, which contributed to a significant increase in operating expenses during 2021
  • Total operating expenses increased by $8.2 million to $31.3 million for the fourth quarter of 2021, as compared to $23.1 million in the third quarter of 2021, due to a $3.0 million increase in research and development costs, $2.9 million increase in engineering services, and $2.3 million increase in general and administrative expenses
  • Through December 31, 2021 and as of March 31, 2022, invested $67.6 million and $80.7 million, respectively, in the construction of BlueWalker 3 satellite. The BlueWalker 3 satellite is substantially complete, and we do not expect to incur material costs in future periods related to the BlueWalker 3 satellite
  • As of December 31, 2021, invested $31.9 million in property and equipment primarily related to the Texas facilities, satellite antennas, test equipment, and leasehold improvements

Conference Call Information

AST SpaceMobile will hold a quarterly business update conference call at 5:00 p.m. (Eastern Time) today, March 31, 2022. The call will be accessible via a live webcast on the Events page of AST SpaceMobile’s Investor Relations website at https://investors.ast-science.com/. 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 FacebookTwitterLinkedIn and YouTube. Watch this video for an overview of the SpaceMobile mission.

To receive alerts about upcoming events and press releases, please sign up for our investor relations email alerts list at https://investors.ast-science.com/ir-resources/email-alerts.

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 memoranda of understanding and preliminary agreements; (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 S-1 Registration Statement filed with the SEC on June 25, 2021 (File No. 333-257425) as well as the Risk Factors contained in Part II, Item 1A of AST SpaceMobile’s Form 10-Q dated August 16, 2021, as well as the Risk Factors to be included in AST SpaceMobile’s Annual Report on Form 10-K, to be filed with the SEC on March 31, 2022.

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 S-1 Registration Statement filed with the SEC on June 25, 2021 (File No. 333-257425) as well as the Risk Factors contained in Part II, Item 1A of AST SpaceMobile’s Form 10-Q dated August 16, 2021, as well as the Risk Factors to be included in AST SpaceMobile’s Annual Report on Form 10-K, to be filed with the SEC on March 31, 2022. AST SpaceMobile’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, AST SpaceMobile disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Fourth Quarter and Fiscal Year 2021 Financial Results

 

AST SPACEMOBILE, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)

 

December 31,

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$

321,787

$

42,777

Restricted cash

2,750

Accounts receivable

2,173

2,081

Inventories

1,412

2,591

Prepaid expenses

3,214

1,249

Other current assets

4,467

2,234

Total current assets

335,803

50,932

Property and equipment:

BlueWalker 3 satellite – construction in progress

67,615

27,013

Property and equipment, net

28,327

10,057

Total property and equipment, net

95,942

37,070

Other non-current assets:

Operating lease right-of-use assets, net

7,991

7,045

Intangible assets, net

242

526

Goodwill

3,641

3,912

Other non-current assets

317

160

Total other non-current assets

12,191

11,643

TOTAL ASSETS

$

443,936

$

99,645

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

6,638

$

4,990

Accrued expenses and other current liabilities

7,469

4,222

Deferred revenue

6,636

3,401

Current operating lease liabilities

634

504

Total current liabilities

21,377

13,117

Warrant liabilities

58,062

Non-current operating lease liabilities

7,525

6,541

Long-term debt

5,000

Total liabilities

91,964

19,658

Commitments and contingencies

Stockholders’ Equity:

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

5

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

5

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

8

Additional paid-in capital

171,155

Common equity (pre-combination)

117,573

Accumulated other comprehensive loss

(433

)

(168

)

Accumulated deficit

(70,461

)

(39,908

)

Noncontrolling interest

251,693

2,490

Total stockholders’ equity

351,972

79,987

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

443,936

$

99,645

 
 
 

AST SPACEMOBILE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

Year Ended December 31,

2021

2020

Revenues

$

12,405

$

5,967

Cost of sales (exclusive of items shown separately below)

7,563

3,025

Gross profit

4,842

2,942

Operating expenses:

Engineering services

29,599

13,081

General and administrative costs

35,636

12,320

Research and development costs

23,440

1,011

Depreciation and amortization

2,913

887

Total operating expenses

91,588

27,299

Other income:

Gain on remeasurement of warrant liabilities

15,766

Other income (expense), net

(1,950

)

83

Total other income, net

13,816

83

Loss before income tax expense

(72,930

)

(24,274

)

Income tax expense

331

131

Net loss before allocation to noncontrolling interest

(73,261

)

(24,405

)

Net loss attributable to noncontrolling interest

(42,708

)

(344

)

Net loss attributable to common stockholders

$

(30,553

)

$

(24,061

)

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

Basic and diluted

$

(0.37

)

N/A

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

Basic and diluted

51,729,785

N/A

 

(1) Earnings per share information has not been presented for periods prior to the Business Combination, as it resulted in values that would not be meaningful to the readers of these consolidated financial statements. Refer to Note 16 in the Notes to the Consolidated Financial Statements included in our Form 10-K for the year ended December 31, 2021 for further information.

 
 

AST SPACEMOBILE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(dollars in thousands)

 
 

Year Ended December 31,

2021

2020

Net income (loss) before allocation to noncontrolling interest

$

(73,261

)

$

(24,405

)

Other comprehensive income (loss)

Foreign currency translation adjustments

(666

)

382

Total other comprehensive income (loss)

(666

)

382

Total comprehensive income (loss) before allocation to noncontrolling interest

(73,927

)

(24,023

)

Comprehensive income (loss) attributable to noncontrolling interest

(43,109

)

(123

)

Comprehensive income (loss) attributable to common stockholders

$

(30,818

)

$

(23,900

)

 
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except per share data)
 
Three Months Ended December 31,

2021

2020

 
Revenues

$

6,220

$

2,702

 
Cost of sales (exclusive of items shown separately below)

3,441

391

 
Gross profit

2,779

2,311

 
Operating expenses:
Engineering services

10,842

4,655

General and administrative costs

11,605

4,682

Research and development costs

7,949

951

Depreciation and amortization

864

470

Total operating expenses

31,260

10,758

 
Other income:
Gain on remeasurement of warrant liabilities

18,042

Other income (expense), net

(2,106

)

25

Total other income, net

15,936

25

 
Loss before income tax expense

(12,545

)

(8,422

)

Income tax expense

258

131

Net loss before allocation to noncontrolling interest

(12,803

)

(8,553

)

 
Net loss attributable to noncontrolling interest

(9,693

)

(17

)

Net loss attributable to common stockholders

$

(3,110

)

$

(8,536

)

Net loss per share of common stock attributable to common stockholders (1)
Basic and diluted

(0.06

)

N/A

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

51,729,943

N/A

 
 
(1) Earnings per share information has not been presented for periods prior to the Business Combination, as it resulted in values that would not be meaningful to the users of these unaudited condensed consolidated financial statements.
 
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(dollars in thousands)
 
Three Months Ended December 31,

2021

2020

 
Net income (loss) before allocation to noncontrolling interest

$

(12,803

)

$

(8,553

)

Other comprehensive income (loss)
Foreign currency translation adjustments

(172

)

128

Total other comprehensive income (loss)

(172

)

128

Total comprehensive income (loss) before allocation to noncontrolling interest

(12,975

)

(8,425

)

Comprehensive income (loss) attributable to noncontrolling interest

(9,826

)

94

Comprehensive income (loss) attributable to common stockholders

$

(3,149

)

$

(8,519

)

 

AST SPACEMOBILE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

 

Years Ended December 31,

2021

2020

Cash flows from operating activities:

Net loss before allocation to noncontrolling interest

$

(73,261

)

$

(24,405

)

Adjustments to reconcile net loss before noncontrolling interest to cash

used in operating activities:

Depreciation

2,689

670

Amortization of intangible assets

224

217

(Gain) loss on remeasurement of warrant liabilities

(15,766

)

Non-cash lease expense

574

219

Stock-based compensation

3,736

283

Changes in operating assets and liabilities:

Accounts receivable

(220

)

(1,568

)

Prepaid expenses and other current assets

(4,216

)

(1,485

)

Inventory

1,039

(2,236

)

Accounts payable and accrued expenses

2,091

3,476

Operating lease liabilities

(398

)

(219

)

Deferred revenue

3,572

2,235

Other assets and liabilities

(159

)

6

Net cash used in operating activities

(80,095

)

(22,807

)

Cash flows from investing activities:

Purchase of property and equipment

(15,080

)

(8,123

)

Purchase of intangible asset

(23

)

BlueWalker 3 satellite – construction in process

(39,712

)

(22,258

)

Net cash used in investing activities

(54,792

)

(30,404

)

Cash flows from financing activities:

Proceeds from Business Combination

456,420

Direct costs incurred for the Business Combination

(39,542

)

(775

)

Proceeds from warrant exercises

14

Repayment for founder bridge loan

(1,750

)

Proceeds from issuance of Series B Preferred Stock

79,833

Issuance costs from issuance of Series B Preferred Stock

(7,745

)

Proceeds from promissory note with common shareholder

100

Proceeds from debt

49

Net cash provided by financing activities

416,941

69,663

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

(294

)

(173

)

Net increase in cash, cash equivalents and restricted cash

281,760

16,279

Cash, cash equivalents and restricted cash, beginning of period

42,777

26,498

Cash, cash equivalents and restricted cash, end of period

$

324,537

$

42,777

Supplemental disclosure of cash flow information:

Non-cash transactions:

Purchases of construction in process in accounts payable

$

3,265

$

2,615

Purchases of property and equipment in accounts payable

1,429

794

Right-of-use assets obtained in exchange for operating lease liabilities as of January 1, 2020 upon adoption of ASC 842

6,472

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

1,557

734

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

5,000

Cash paid during the fiscal year for:

Interest

$

13

$

25

Income taxes, net

186

134

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