10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2022

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission File No. 001-39040

 

AST SPACEMOBILE, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

84-2027232

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

Midland Intl. Air & Space Port

 

 

2901 Enterprise Lane

Midland, Texas

 

79706

(Address of principal executive offices)

 

(Zip Code)

 

(432) 276-3966

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading 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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

☐ Large accelerated filer

☐ Accelerated filer

Non-accelerated filer

 Smaller reporting company

 

 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.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes No ☒

 

As of August 5, 2022 there were 53,164,732 shares of Class A common stock, $0.0001 per value, 51,636,922 shares of Class B common stock, $0.0001 par value, and 78,163,078 shares of Class C common stock, $0.0001 par value, issued and outstanding.

 

 

 

 


 

 

AST SPACEMOBILE, INC.

FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2022

 

TABLE OF CONTENTS

 

 

 

Page

Part I. Financial Information

 

1

Item 1. Interim Financial Statements

 

1

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021 (Unaudited)

 

1

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021 (Unaudited)

 

2

Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2022 and 2021 (Unaudited)

 

3

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021 (Unaudited)

 

4

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 (Unaudited)

 

6

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

25

Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk

 

36

Item 4. Controls and Procedures

 

36

Part II. Other Information

 

37

Item 1. Legal Proceedings

 

37

Item 1A. Risk Factors

 

37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

37

Item 3. Defaults Upon Senior Securities

 

37

Item 4. Mine Safety Disclosures

 

37

Item 5. Other Information

 

37

Item 6. Exhibits

 

38

Part III. Signatures

 

39

 

i


 

PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

 

AST SPACEMOBILE, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,
2022

 

 

December 31,
2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

202,371

 

 

$

321,787

 

Restricted cash

 

 

-

 

 

 

2,750

 

Accounts receivable

 

 

3,569

 

 

 

2,173

 

Inventories

 

 

3,520

 

 

 

1,412

 

Prepaid expenses

 

 

7,020

 

 

 

2,831

 

Other current assets

 

 

16,446

 

 

 

4,850

 

Total current assets

 

 

232,926

 

 

 

335,803

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

BlueWalker 3 satellite - construction in progress

 

 

86,584

 

 

 

67,615

 

Property and equipment, net

 

 

37,725

 

 

 

28,327

 

Total property and equipment, net

 

 

124,309

 

 

 

95,942

 

 

 

 

 

 

 

 

Other non-current assets:

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

 

7,731

 

 

 

7,991

 

Goodwill

 

 

3,355

 

 

 

3,641

 

Other non-current assets

 

 

16,543

 

 

 

559

 

Total other non-current assets

 

 

27,629

 

 

 

12,191

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

384,864

 

 

$

443,936

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

5,157

 

 

$

6,638

 

Accrued expenses and other current liabilities

 

 

8,670

 

 

 

7,469

 

Deferred revenue

 

 

7,490

 

 

 

6,636

 

Current operating lease liabilities

 

 

858

 

 

 

634

 

Total current liabilities

 

 

22,175

 

 

 

21,377

 

 

 

 

 

 

 

 

Warrant liabilities

 

 

40,495

 

 

 

58,062

 

Non-current operating lease liabilities

 

 

7,040

 

 

 

7,525

 

Long-term debt

 

 

4,880

 

 

 

5,000

 

Total liabilities

 

 

74,590

 

 

 

91,964

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Class A Common Stock, $.0001 par value; 800,000,000 shares authorized; 51,945,785 and 51,730,904 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.

 

 

5

 

 

 

5

 

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

 

 

5

 

 

 

5

 

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

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

175,400

 

 

 

171,155

 

Accumulated other comprehensive loss

 

 

(526

)

 

 

(433

)

Accumulated deficit

 

 

(84,106

)

 

 

(70,461

)

Noncontrolling interest

 

 

219,488

 

 

 

251,693

 

Total stockholders' equity

 

 

310,274

 

 

 

351,972

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

384,864

 

 

$

443,936

 

 

 

 

 

 

 

 

See accompanying notes to the condensed consolidated financial statements

 

 

1


 

 

AST SPACEMOBILE, INC.

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

 

 

For the Six Months Ended June 30,

 

 

 

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

7,264

 

 

$

2,773

 

 

 

$

9,658

 

 

$

3,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (exclusive of items shown separately below)

 

 

2,202

 

 

 

1,112

 

 

 

 

4,189

 

 

 

2,019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

5,062

 

 

 

1,661

 

 

 

 

5,469

 

 

 

1,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering services

 

 

11,999

 

 

 

5,784

 

 

 

 

23,716

 

 

 

10,731

 

 

General and administrative costs

 

 

13,075

 

 

 

9,157

 

 

 

 

24,718

 

 

 

14,693

 

 

Research and development costs

 

 

9,145

 

 

 

9,589

 

 

 

 

17,426

 

 

 

10,603

 

 

Depreciation and amortization

 

 

1,185

 

 

 

567

 

 

 

 

2,285

 

 

 

1,182

 

 

Total operating expenses

 

 

35,404

 

 

 

25,097

 

 

 

 

68,145

 

 

 

37,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on remeasurement of warrant liabilities

 

 

23,049

 

 

 

(41,677

)

 

 

 

17,567

 

 

 

(41,677

)

 

Other expense, net

 

 

(679

)

 

 

-

 

 

 

 

(664

)

 

 

(28

)

 

Total other income (expense), net

 

 

22,370

 

 

 

(41,677

)

 

 

 

16,903

 

 

 

(41,705

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax expense

 

 

(7,972

)

 

 

(65,113

)

 

 

 

(45,773

)

 

 

(77,198

)

 

Income tax expense

 

 

96

 

 

 

56

 

 

 

 

198

 

 

 

57

 

 

Net loss before allocation to noncontrolling interest

 

 

(8,068

)

 

 

(65,169

)

 

 

 

(45,971

)

 

 

(77,255

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

(5,144

)

 

 

(45,191

)

 

 

 

(32,326

)

 

 

(45,697

)

 

Net loss attributable to common stockholders

 

$

(2,924

)

 

$

(19,978

)

 

 

$

(13,645

)

 

$

(31,558

)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.06

)

 

$

(0.39

)

 

 

$

(0.26

)

 

$

(0.39

)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

51,868,658

 

 

 

51,729,704

 

 

 

 

51,814,888

 

 

 

51,729,704

 

 

 

(1) Earnings per share information excludes earnings for the periods prior to the Business Combination, as it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Refer to Note 14 for further information.

 

See accompanying notes to the condensed consolidated financial statements

 

2


 

 

AST SPACEMOBILE, INC.

 

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

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

 

For the Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss before allocation to noncontrolling interest

 

$

(8,068

)

 

$

(65,169

)

 

$

(45,971

)

 

$

(77,255

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(166

)

 

 

(16

)

 

 

(598

)

 

 

(281

)

Total other comprehensive loss

 

 

(166

)

 

 

(16

)

 

 

(598

)

 

 

(281

)

Total comprehensive loss before allocation to noncontrolling interest

 

 

(8,234

)

 

 

(65,185

)

 

 

(46,569

)

 

 

(77,536

)

Comprehensive loss attributable to noncontrolling interest

 

 

(5,289

)

 

 

(45,199

)

 

 

(32,831

)

 

 

(45,773

)

Comprehensive loss attributable to common stockholders

 

$

(2,945

)

 

$

(19,986

)

 

$

(13,738

)

 

$

(31,763

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to the condensed consolidated financial statements

 

 

3


 

 

AST SPACEMOBILE, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

 

(dollars in thousands, except share data)

 

Three Months Ended June 30, 2022

 

 

 

Class A
Common Stock

 

 

Class B
Common Stock

 

 

Class C
Common Stock

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Values

 

 

Shares

 

 

Values

 

 

Shares

 

 

Values

 

 

Paid-in
Capital

 

 

Comprehensive
Loss

 

 

Accumulated Deficit

 

 

Noncontrolling Interest

 

 

Total Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2022

 

 

51,782,254

 

 

$

5

 

 

 

51,636,922

 

 

$

5

 

 

 

78,163,078

 

 

$

8

 

 

$

172,708

 

 

$

(505

)

 

$

(81,182

)

 

$

224,839

 

 

$

315,878

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,242

 

 

 

-

 

 

 

-

 

 

 

198

 

 

 

2,440

 

Issuance of common stock for commitment shares

 

 

21,969

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

228

 

 

 

-

 

 

 

-

 

 

 

(38

)

 

 

190

 

Vesting of restricted stock units

 

 

141,562

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

222

 

 

 

-

 

 

 

-

 

 

 

(222

)

 

 

-

 

Foreign currency translation adjustments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(21

)

 

 

-

 

 

 

(145

)

 

 

(166

)

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,924

)

 

 

(5,144

)

 

$

(8,068

)

Balance, June 30, 2022

 

 

51,945,785

 

 

$

5

 

 

 

51,636,922

 

 

$

5

 

 

 

78,163,078

 

 

$

8

 

 

$

175,400

 

 

$

(526

)

 

$

(84,106

)

 

$

219,488

 

 

$

310,274

 

 

Six Months Ended June 30, 2022

 

 

 

Class A
Common Stock

 

 

Class B
Common Stock

 

 

Class C
Common Stock

 

 

Additional

 

 

Accumulated
Other

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Values

 

 

Shares

 

 

Values

 

 

Shares

 

 

Values

 

 

Paid-in
Capital

 

 

Comprehensive
Loss

 

 

Accumulated Deficit

 

 

Noncontrolling Interest

 

 

Total Equity

 

Balance, December 31, 2021

 

 

51,730,904

 

 

$

5

 

 

 

51,636,922

 

 

$

5

 

 

 

78,163,078

 

 

$

8

 

 

$

171,155

 

 

$