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 September 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 November 11, 2022 there were 55,391,978 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 SEPTEMBER 30, 2022

 

TABLE OF CONTENTS

 

 

 

Page

Part I. Financial Information

 

1

Item 1. Interim Financial Statements

 

1

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

 

1

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

 

2

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

 

3

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

 

4

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

 

6

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

8

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

 

27

Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk

 

38

Item 4. Controls and Procedures

 

38

Part II. Other Information

 

39

Item 1. Legal Proceedings

 

39

Item 1A. Risk Factors

 

39

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

 

39

Item 3. Defaults Upon Senior Securities

 

39

Item 4. Mine Safety Disclosures

 

39

Item 5. Other Information

 

39

Item 6. Exhibits

 

40

Part III. Signatures

 

41

 

i


 

PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

 

AST SPACEMOBILE, INC.

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

September 30,
2022

 

 

December 31,
2021

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

198,869

 

 

$

321,787

 

Restricted cash (1)

 

 

660

 

 

 

2,750

 

Accounts receivable

 

 

-

 

 

 

2,173

 

Inventories

 

 

-

 

 

 

1,412

 

Prepaid expenses

 

 

5,650

 

 

 

2,831

 

Other current assets

 

 

20,127

 

 

 

4,850

 

Total current assets

 

 

225,306

 

 

 

335,803

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

BlueWalker 3 satellite - construction in progress

 

 

92,094

 

 

 

67,615

 

Property and equipment, net

 

 

43,543

 

 

 

28,327

 

Total property and equipment, net

 

 

135,637

 

 

 

95,942

 

 

 

 

 

 

 

 

Other non-current assets:

 

 

 

 

 

 

Operating lease right-of-use assets, net

 

 

7,901

 

 

 

7,991

 

Goodwill

 

 

-

 

 

 

3,641

 

Other non-current assets

 

 

17,424

 

 

 

559

 

Total other non-current assets

 

 

25,325

 

 

 

12,191

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

386,268

 

 

$

443,936

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

9,546

 

 

$

6,638

 

Accrued expenses and other current liabilities

 

 

10,837

 

 

 

7,469

 

Deferred revenue

 

 

-

 

 

 

6,636

 

Current operating lease liabilities

 

 

803

 

 

 

634

 

Total current liabilities

 

 

21,186

 

 

 

21,377

 

 

 

 

 

 

 

 

Warrant liabilities

 

 

56,390

 

 

 

58,062

 

Non-current operating lease liabilities

 

 

7,195

 

 

 

7,525

 

Long-term debt

 

 

4,820

 

 

 

5,000

 

Total liabilities

 

 

89,591

 

 

 

91,964

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity:

 

 

 

 

 

 

Class A Common Stock, $.0001 par value; 800,000,000 shares authorized; 54,369,296 and 51,730,904 shares issued and outstanding as of September 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 September 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 September 30, 2022 and December 31, 2021, respectively.

 

 

8

 

 

 

8

 

Additional paid-in capital

 

 

185,435

 

 

 

171,155

 

Accumulated other comprehensive loss

 

 

(271

)

 

 

(433

)

Accumulated deficit

 

 

(93,872

)

 

 

(70,461

)

Noncontrolling interest

 

 

205,367

 

 

 

251,693

 

Total stockholders' equity

 

 

296,677

 

 

 

351,972

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

386,268

 

 

$

443,936

 

 

(1)
As of September 30, 2022, restricted cash of $0.7 million represents deposits against the bank guaranty issued to the landlord for lease of a property. As of December 31, 2021, restricted cash of $2.8 million represented deposits with a bank to exclusively use for capital improvements at the Company’s facility in Texas, United States.

 

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 September 30,

 

 

 

For the Nine Months Ended September 30,

 

 

 

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

4,168

 

 

$

2,450

 

 

 

$

13,825

 

 

$

6,185

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (exclusive of items shown separately below)

 

 

2,525

 

 

 

2,103

 

 

 

 

6,714

 

 

 

4,122

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

1,643

 

 

 

347

 

 

 

 

7,111

 

 

 

2,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering services

 

 

14,492

 

 

 

8,026

 

 

 

 

38,208

 

 

 

18,757

 

 

General and administrative costs

 

 

12,916

 

 

 

9,331

 

 

 

 

37,634

 

 

 

24,031

 

 

Research and development costs

 

 

13,543

 

 

 

4,888

 

 

 

 

30,969

 

 

 

15,491

 

 

Depreciation and amortization

 

 

1,172

 

 

 

867

 

 

 

 

3,457

 

 

 

2,049

 

 

Total operating expenses

 

 

42,123

 

 

 

23,112

 

 

 

 

110,268

 

 

 

60,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) gain on remeasurement of warrant liabilities

 

 

(15,897

)

 

 

39,401

 

 

 

 

1,669

 

 

 

(2,276

)

 

Other income, net

 

 

24,875

 

 

 

184

 

 

 

 

24,211

 

 

 

156

 

 

Total other income (expense), net

 

 

8,978

 

 

 

39,585

 

 

 

 

25,880

 

 

 

(2,120

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income before income tax expense

 

 

(31,502

)

 

 

16,820

 

 

 

 

(77,277

)

 

 

(60,385

)

 

Income tax expense

 

 

550

 

 

 

16

 

 

 

 

747

 

 

 

73

 

 

Net (loss) income before allocation to noncontrolling interest

 

 

(32,052

)

 

 

16,804

 

 

 

 

(78,024

)

 

 

(60,458

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to noncontrolling interest

 

 

(22,286

)

 

 

12,689

 

 

 

 

(54,613

)

 

 

(33,015

)

 

Net (loss) income attributable to common stockholders

 

$

(9,766

)

 

$

4,115

 

 

 

$

(23,411

)

 

$

(27,443

)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.18

)

 

$

0.08

 

 

 

$

(0.45

)

 

$

(0.31

)

 

Diluted

 

$

(0.18

)

 

$

0.07

 

 

 

$

(0.45

)

 

$

(0.31

)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

53,233,552

 

 

 

51,729,704

 

 

 

 

52,292,972

 

 

 

51,729,704

 

 

Diluted

 

 

53,233,552

 

 

 

51,839,841

 

 

 

 

52,292,972

 

 

 

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 15 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 September 30,

 

 

For the Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income before allocation to noncontrolling interest

 

$

(32,052

)

 

$

16,804

 

 

$

(78,024

)

 

$

(60,458

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(1,267

)

 

 

(220

)

 

 

(1,865

)

 

 

(494

)

Total other comprehensive loss

 

 

(1,267

)

 

 

(220

)

 

 

(1,865

)

 

 

(494

)

Total comprehensive (loss) income before allocation to noncontrolling interest

 

 

(33,319

)

 

 

16,584

 

 

 

(79,889

)

 

 

(60,952

)

Comprehensive (loss) income attributable to noncontrolling interest

 

 

(23,083

)

 

 

12,490

 

 

 

(55,915

)

 

 

(33,283

)

Comprehensive (loss) income attributable to common stockholders

 

$

(10,236

)

 

$

4,094

 

 

$

(23,974

)

 

$

(27,669

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 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, June 30, 2022

 

 

51,945,785

 

 

$

5

 

 

 

51,636,922

 

 

$

5

 

 

 

78,163,078

 

 

$

8

 

 

$

175,400

 

 

$

(526

)

 

$

(84,106

)

 

$

219,488

 

 

$

310,274

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2,217

 

 

 

-

 

 

 

-

 

 

 

182

 

 

 

2,399

 

Issuance of common stock in connection with common stock purchase agreement and equity distribution agreement

 

 

2,301,013

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8,132

 

 

 

-

 

 

 

-

 

 

 

10,089

 

 

 

18,221

 

Issuance of incentive units under employee stock plan

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

-

 

 

 

30

 

 

 

30

 

Vesting of restricted stock units

 

 

121,398

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(331

)

 

 

-

 

 

 

-

 

 

 

(86

)

 

 

(417

)

Warrant exercise

 

 

1,100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

-

 

 

 

(2

)

 

 

15

 

Deconsolidation of subsidiary

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

725

 

 

 

 

 

 

(1,251

)

 

 

(526

)

Foreign currency translation adjustments

 

 

-

 

 

 

-

 

 

 

-