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 March 31, 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 May 13, 2022 there were 51,862,973 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 MARCH 31, 2022

TABLE OF CONTENTS

	Page
Part I. Financial Information	1
Item 1. Interim Financial Statements	1
Condensed Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021 (Unaudited)	1
Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021 (Unaudited)	2
Condensed Consolidated Statements of Comprehensive Income (Loss) for three months ended March 31, 2022 and 2021 (Unaudited)	3
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 and 2021 (Unaudited)	4
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021 (Unaudited)	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	32
Item 4. Controls and Procedures	32
Part II. Other Information	33
Item 1. Legal Proceedings	33
Item 1A. Risk Factors	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	34
Part III. Signatures	35

i

PART I - FINANCIAL INFORMATION

Item 1. Interim Financial Statements.

AST SPACEMOBILE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except share data)
	March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	253,731		$	321,787
Restricted cash		1,379			2,750
Accounts receivable		2,593			2,173
Inventories		1,827			1,412
Prepaid expenses		3,537			3,214
Other current assets		9,862			4,467
Total current assets		272,929			335,803
Property and equipment:
BlueWalker 3 satellite - construction in progress		82,693			67,615
Property and equipment, net		32,157			28,327
Total property and equipment, net		114,850			95,942
Other non-current assets:
Operating lease right-of-use assets, net		7,990			7,991
Intangible assets, net		205			242
Goodwill		3,546			3,641
Other non-current assets		15,066			317
Total other non-current assets		26,807			12,191
TOTAL ASSETS	$	414,586		$	443,936
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	6,917		$	6,638
Accrued expenses and other current liabilities		7,295			7,469
Deferred revenue		7,800			6,636
Current operating lease liabilities		900			634
Total current liabilities		22,912			21,377
Warrant liabilities		63,544			58,062
Non-current operating lease liabilities		7,312			7,525
Long-term debt		4,940			5,000
Total liabilities		98,708			91,964
Commitments and contingencies (Note 6)
Stockholders' Equity:
Class A Common Stock, $.0001 par value; 800,000,000 shares authorized; 51,782,254 and 51,730,904 shares issued and outstanding as of March 31, 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 March 31, 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 March 31, 2022 and December 31, 2021, respectively.		8			8
Additional paid-in capital		172,708			171,155
Accumulated other comprehensive loss		(505	)		(433	)
Accumulated deficit		(81,182	)		(70,461	)
Noncontrolling interest		224,839			251,693
Total stockholders' equity		315,878			351,972
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	414,586		$	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)
	Three Months Ended March 31,
	2022			2021
Revenues	$	2,394		$	951
Cost of sales (exclusive of items shown separately below)		1,986			896
Gross profit		408			55
Operating expenses:
Engineering services		11,740			5,659
General and administrative costs		11,619			5,537
Research and development costs		8,281			304
Depreciation and amortization		1,100			614
Total operating expenses		32,740			12,114
Other income (expense):
Loss on remeasurement of warrant liabilities		(5,482	)		-
Other income (expense), net		15			(28	)
Total other expense, net		(5,467	)		(28	)
Loss before income tax expense		(37,799	)		(12,087	)
Income tax expense		104			1
Net loss before allocation to noncontrolling interest		(37,903	)		(12,088	)
Net loss attributable to noncontrolling interest		(27,182	)		(508	)
Net loss attributable to common stockholders	$	(10,721	)	$	(11,580	)
Net loss per share of common stock attributable to common stockholders (1)
Basic and diluted	$	(0.21	)	N/A
Weighted average shares used in computing net loss per share of common stock (1)
Basic and diluted		51,760,520		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 condensed consolidated financial statements. Refer to Note 13 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)
	Three months ended March 31,
	2022			2021
Net loss before allocation to noncontrolling interest	$	(37,903	)	$	(12,088	)
Other comprehensive loss
Foreign currency translation adjustments		(432	)		(263	)
Total other comprehensive loss		(432	)		(263	)
Total comprehensive loss before allocation to noncontrolling interest		(38,335	)		(12,351	)
Comprehensive loss attributable to noncontrolling interest		(27,542	)		(574	)
Comprehensive loss attributable to common stockholders	$	(10,793	)	$	(11,777	)
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 March 31, 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		$	(433	)	$	(70,461	)	$	251,693		$	351,972
Stock-based compensation		-		-		-		-		-		-		1,606			-			-			604			2,210
Issuance of equity under employee stock plan		-		-		-		-		-		-		(228	)		-			-			258			30
Vesting of restricted stock units		51,250		-		-		-		-		-		83			-			-			(83	)		-
Warrant exercise		100		-		-		-		-		-		92			-			-			(91	)		1
Foreign currency translation adjustments		-		-		-		-		-		-		-			(72	)		-			(360	)		(432	)
Net loss		-		-		-		-		-		-		-			-			(10,721	)		(27,182	)	$	(37,903	)
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

Three Months Ended March 31, 2021
	Class A Common Stock				Class B Common Stock				Class C Common Stock				Additional		Common Equity (Pre-Combination)				Accumulated Other
	Shares		Values		Shares		Values		Shares		Values		Paid-in Capital		Shares		Values		Comprehensive Loss			Accumulated Deficit			Noncontrolling Interest			Total Equity
Balance, December 31, 2020 (1)		-	$	-		-	$	-		-	$	-	$	-		129,800,000	$	117,573	$	(168	)	$	(39,908	)	$	2,490		$	79,987
Stock-based compensation pre Business Combination		-		-		-		-		-		-		-		-		370		-			-			-			370
Foreign currency translation adjustments		-		-		-		-		-		-		-		-		-		(197	)		-			(66	)		(263	)
Net loss		-		-		-		-		-		-		-		-		-		-			(11,580	)		(508	)		(12,088	)
Balance, March 31, 2021		-	$	-		-	$	-		-	$	-	$	-		129,800,000	$	117,943	$	(365	)	$	(51,488	)	$	1,916		$	68,006
(1) Previously reported amounts have been adjusted for the retroactive application of the recapitalization related to the Business Combination. Refer to Note 3 for further information.
See accompanying notes to the condensed consolidated financial statements

4

AST SPACEMOBILE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

	Three months ended March 31,
	2022			2021
Cash flows from operating activities:
Net loss before allocation to noncontrolling interest	$	(37,903	)	$	(12,088	)
Adjustments to reconcile net loss before noncontrolling interest to cash used in operating activities:
Depreciation		1,046			557
Amortization of intangible assets		54			57
Loss on remeasurement of warrant liabilities		5,482			-
Non-cash lease expense		170			100
Stock-based compensation		2,254			356
Changes in operating assets and liabilities:
Accounts receivable		(470	)		942
Prepaid expenses and other current assets		(6,838	)		100
Inventory		(457	)		(443	)
Accounts payable and accrued expenses		2,684			1,273
Operating lease liabilities		(112	)		(94	)
Deferred revenue		1,333			725
Other assets and liabilities		(14,751	)		(12	)
Net cash used in operating activities		(47,508	)		(8,527	)
Cash flows from investing activities:
Purchase of property and equipment		(4,660	)		(2,728	)
BlueWalker 3 satellite - construction in process		(16,907	)		(8,695	)
Net cash used in investing activities		(21,567	)		(11,423	)
Cash flows from financing activities:
Direct costs incurred for the Business Combination		-			(595	)
Proceeds from warrant exercises		33			-
Proceeds from debt		97			-
Net cash provided by (used in) financing activities		130			(595	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(482	)		(19	)
Net decrease in cash, cash equivalents and restricted cash		(69,427	)		(20,564	)
Cash, cash equivalents and restricted cash, beginning of period