Ast spacemobile provides fourth quarter and full year 2021 business update
Midland, texas--(business wire)--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 facebook, twitter, linkedin 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 ) 2021 2020 $ 6,220 $ 2,702 3,441 391 2,779 2,311 10,842 4,655 11,605 4,682 7,949 951 864 470 31,260 10,758 18,042 - (2,106 ) 25 15,936 25 (12,545 ) (8,422 ) 258 131 (12,803 ) (8,553 ) (9,693 ) (17 ) $ (3,110 ) $ (8,536 ) (0.06 ) n/a 51,729,943 n/a 2021 2020 $ (12,803 ) $ (8,553 ) (172 ) 128 (172 ) 128 (12,975 ) (8,425 ) (9,826 ) 94 $ (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
