Confirmed historic space-based 4G LTE cellular
broadband capabilities alongside AT&T, Vodafone and Nokia; and
completed comprehensive interim financing package
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 second quarter ended June 30, 2023.
“AST SpaceMobile continues to make history. This quarter we
achieved space-based 4G LTE cellular broadband capabilities to
everyday smartphones, reaching speeds above 10 Mbps during
BlueWalker 3 testing alongside AT&T, Vodafone and Nokia,” said
Abel Avellan, Chairman and Chief Executive Officer of AST
SpaceMobile. “We are now laser-focused on the manufacturing of our
BlueBird satellites. The first five satellites are fully-funded
with a planned launch in Q1 2024 as we target to offer initial
commercial service in 2024.”
“On the back of the progress of our company technically,
commercially and industrially, we have received multiple
indications of interest for strategic investments with both
equity-linked and non-dilutive commercial payments,” said Scott
Wisniewski, Chief Strategy Officer of AST SpaceMobile. “Proceeds
from this prospective capital raise are intended to fund the
manufacturing and launch of additional BlueBird satellites launches
beyond our first five commercial satellites.”
“We are happy to announce the completion of a comprehensive
financing package providing us up to $179 million of cash and
liquidity,” said Sean Wallace, Chief Financial Officer of AST
SpaceMobile. “This financing package is comprised of an up to $100
million Senior Secured Credit Facility and a $15 million
Equipment-Backed Loan completed today, in addition to a $57 million
previously announced common stock offering in June 2023 and $7
million raised under the ATM program during the second quarter of
2023.”
Business Update
- History made, again, with space-based 4G LTE cellular broadband
capabilities confirmed to everyday smartphones, reaching speeds
above 10 Mbps during BlueWalker 3 testing alongside AT&T,
Vodafone and Nokia
- Continued commercial and regulatory progress, with 40+ MOUs and
agreements with mobile network operators globally that have ~2.4
billion subscribers
- Block 1 BlueBird program is fully-funded, with manufacturing
underway and ramping ahead of the planned launch in Q1 2024 of our
first five commercial satellites
- Raised cash and liquidity of up to $179 million, with a
comprehensive financing package of non-dilutive debt and equity
designed to support strategic investment process
- Up to $100 million Senior Secured Credit Facility with an
initial gross draw of $48.5 million
- $15 million Equipment-Backed Loan
- $57 million of previously announced common stock offering in
June 2023
- $7 million raised under the ATM program during the second
quarter of 2023
- Received multiple indications of interest for strategic
investment, including both equity-linked investments and
non-dilutive commercial payments
Second Quarter 2023 Financial Highlights
- As of June 30, 2023, we had cash, cash equivalents, and
restricted cash of $191.5 million. After June 30, 2023, added
incremental cash and liquidity of up to $115 million from an up to
$100 million Senior Secured Credit Facility with an initial gross
draw of $48.5 million in gross proceeds and a $15 million
Equipment-Backed Loan.
- Total Adjusted operating expenses for the second quarter of
2023 were $38.4 million, a decrease of $1.9 million as compared to
$40.3 million in the first quarter of 2023, due to a $5.5 million
decrease in research and development costs offset by a $3.3 million
increase in Adjusted engineering services costs and a $0.3 million
increase in Adjusted general and administrative costs.(1)
- As of June 30, 2023, we have incurred approximately $194.1
million of gross capitalized property and equipment costs and
accumulated depreciation and amortization of $22.5 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, August 14, 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, 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 and results of the BW3 satellite tests,
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 ongoing testing of the BW3 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, 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 additional 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.
Second Quarter Financial Results
AST SPACEMOBILE, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollars in thousands, except
share data)
June 30, 2023
December 31, 2022
ASSETS
Current
assets:
Cash and cash equivalents
$
190,835
$
238,588
Restricted cash
636
668
Prepaid expenses
7,127
4,100
Other current assets
22,976
24,954
Total current assets
221,574
268,310
Property and
equipment:
Property and equipment
194,145
152,968
Less: Accumulated depreciation
(22,508
)
(6,979
)
Total property and equipment,
net
171,637
145,989
Other non-current
assets:
Operating lease right-of-use assets,
net
13,486
7,671
Other non-current assets
1,770
16,402
Total other non-current assets
15,256
24,073
TOTAL ASSETS
$
408,467
$
438,372
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current
liabilities:
Accounts payable
5,108
13,929
Accrued expenses and other current
liabilities
24,256
13,145
Current operating lease liabilities
1,305
722
Total current liabilities
30,669
27,796
Warrant liabilities
24,973
38,946
Non-current operating lease
liabilities
12,314
7,046
Long-term debt
4,634
4,758
Total liabilities
72,590
78,546
Commitments and contingencies
Stockholders'
Equity:
Class A Common Stock, $.0001 par value;
800,000,000 shares authorized; 89,404,419 and 71,819,926 shares
issued and outstanding as of June 30, 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 June 30, 2023 and December 31, 2022,
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, 2023 and December 31, 2022,
respectively.
8
8
Additional paid-in capital
282,869
235,384
Accumulated other comprehensive income
(loss)
158
229
Accumulated deficit
(136,827
)
(102,101
)
Noncontrolling interest
189,655
226,294
Total stockholders' equity
335,877
359,826
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
408,467
$
438,372
AST SPACEMOBILE, INC.
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,
2023
2022
2023
2022
Revenues
$
-
$
7,264
$
-
$
9,658
Cost of sales (exclusive of items shown
separately below)
-
2,202
-
4,189
Gross profit
-
5,062
-
5,469
Operating
expenses:
Engineering services costs
22,813
11,999
39,296
23,716
General and administrative costs
10,221
13,075
20,078
24,718
Research and development costs
10,921
9,145
27,302
17,426
Depreciation and amortization
14,115
1,185
15,848
2,285
Total operating expenses
58,070
35,404
102,524
68,145
Other income
(expense):
Gain on remeasurement of warrant
liabilities
6,475
23,049
13,973
17,567
Other income (expense), net
1,217
(679
)
(6,927
)
(664
)
Total other income (expense),
net
7,692
22,370
7,046
16,903
Loss before income tax benefit
(expense)
(50,378
)
(7,972
)
(95,478
)
(45,773
)
Income tax benefit (expense)
789
(96
)
673
(198
)
Net loss before allocation to
noncontrolling interest
(49,589
)
(8,068
)
(94,805
)
(45,971
)
Net loss attributable to noncontrolling
interest
(31,181
)
(5,144
)
(60,079
)
(32,326
)
Net loss attributable to common
stockholders
$
(18,408
)
$
(2,924
)
$
(34,726
)
$
(13,645
)
Net loss per share attributable to holders
of Class A Common Stock
Basic and diluted
$
(0.24
)
$
(0.06
)
$
(0.47
)
$
(0.26
)
Weighted-average shares of Class A Common
Stock outstanding
Basic and diluted
75,640,650
51,868,658
73,753,412
51,814,888
AST SPACEMOBILE, INC.
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
(Dollars in thousands)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
Net loss before allocation to
noncontrolling interest
$
(49,589
)
$
(8,068
)
$
(94,805
)
$
(45,971
)
Other comprehensive loss
Foreign currency translation
adjustments
(40
)
(166
)
(168
)
(598
)
Total other comprehensive loss
(40
)
(166
)
(168
)
(598
)
Total comprehensive loss before allocation
to noncontrolling interest
(49,629
)
(8,234
)
(94,973
)
(46,569
)
Comprehensive loss attributable to
noncontrolling interest
(31,196
)
(5,289
)
(60,176
)
(32,831
)
Comprehensive loss attributable to common
stockholders
$
(18,433
)
$
(2,945
)
$
(34,797
)
$
(13,738
)
AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
For the Six Months Ended June
30,
2023
2022
Cash flows from operating activities:
Net loss before allocation to
noncontrolling interest
$
(94,805
)
$
(45,971
)
Adjustments to reconcile net loss before
noncontrolling interest to cash used in operating activities:
Depreciation and amortization
15,848
2,285
Gain on remeasurement of warrant
liabilities
(13,973
)
(17,567
)
Non-cash lease expense
378
267
Stock-based compensation
8,006
4,695
Issuance of common stock for commitment
shares
-
190
Changes in operating assets and
liabilities:
Accounts receivable
-
(1,613
)
Prepaid expenses and other current
assets
(15,547
)
(16,332
)
Inventory
-
(2,313
)
Accounts payable and accrued expenses
(4,112
)
2,838
Operating lease liabilities
(343
)
(261
)
Deferred revenue
-
1,393
Other assets and liabilities
16,559
(16,116
)
Net cash used in operating activities
(87,989
)
(88,505
)
Cash flows from investing activities:
Purchase of property and equipment
(22,972
)
(33,600
)
Net cash used in investing activities
(22,972
)
(33,600
)
Cash flows from financing activities:
Issuance of equity under employee stock
plan
180
-
Proceeds from issuance of common stock,
net of issuance costs
63,567
-
Proceeds from warrant exercises
-
33
(Repayments of) proceeds from debt
(120
)
230
Net cash provided by financing
activities
63,627
263
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(451
)
(324
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(47,785
)
(122,166
)
Cash, cash equivalents and restricted
cash, beginning of period
239,256
324,537
Cash, cash equivalents and restricted
cash, end of period
$
191,471
$
202,371
Supplemental disclosure of cash flow
information:
Non-cash transactions:
Purchases of property and equipment in
accounts payable and accrued expenses
$
852
$
1,718
Right-of-use assets obtained in exchange
for operating lease liabilities
6,510
272
AST SPACEMOBILE, INC.
RECONCILIATION OF GAAP
REPORTED TO NON-GAAP ADJUSTED MEASURES (UNAUDITED)
(Dollars in thousands)
For the Three Months Ended
June 30, 2023
GAAP Reported
Stock-Based Compensation
Expense
Adjusted
Engineering services costs
$
22,813
$
(4,458
)
$
18,355
General and administrative costs
10,221
(1,074
)
9,147
Research and development costs
10,921
-
10,921
Depreciation and amortization
14,115
-
14,115
Total operating expenses
$
58,070
$
(5,532
)
$
52,538
Less: Depreciation and amortization
(14,115
)
Adjusted operating expenses
$
38,423
For the Three Months Ended
March 31, 2023
GAAP Reported
Stock-Based Compensation
Expense
Adjusted
Engineering services costs
$
16,483
$
(1,392
)
$
15,091
General and administrative costs
9,857
(1,082
)
8,775
Research and development costs
16,381
-
16,381
Depreciation and amortization
1,733
-
1,733
Total operating expenses
$
44,454
$
(2,474
)
$
41,980
Less: Depreciation and amortization
(1,733
)
Adjusted operating expenses
$
40,247
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 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230814808384/en/
Investor Contact: Scott Wisniewski
investors@ast-science.com
Media Contact: Allison+Partners Eva Murphy Ryan
917-547-7289 AstSpaceMobile@allisonpr.com
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