AST SpaceMobile, Inc. — 2021 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2021. The filing reports annual results, not a standalone fourth quarter. Unless noted otherwise, amounts below are U.S. dollars.
Business context
AST SpaceMobile is developing a planned low-Earth-orbit satellite network intended to deliver broadband connectivity directly to standard, unmodified mobile phones through mobile network operator (MNO) partners. The service had not launched and had generated no revenue by year-end; all reported revenue came from its 51%-owned Nano subsidiary, which sells satellite technology, components and related services.
The April 6, 2021 business combination brought AST LLC under the public company in an “Up-C” structure. AST SpaceMobile held approximately 28.5% of AST LLC at closing and consolidated its results; existing AST LLC holders retained approximately 71.5%. Consequently, the 2021 and 2020 comparisons reflect different ownership and reporting circumstances.
Financial results and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | $12.4 million | $6.0 million |
| Gross profit | $4.8 million | $2.9 million |
| Gross margin | 39.0% | 49.3% |
| Operating expenses | $91.6 million | $27.3 million |
| Net loss before noncontrolling-interest allocation | $73.3 million | $24.4 million |
| Net loss attributable to common stockholders | $30.6 million | $24.1 million |
| Cash used in operating activities | $80.1 million | $22.8 million |
| Cash used in investing activities | $54.8 million | $30.4 million |
Revenue increased 108%, primarily from new and existing Nano contracts. Operating expenses rose sharply as engineering, research and development, staffing and public-company costs expanded. Gross margin declined year over year. The $15.8 million gain from remeasuring warrant liabilities was noncash and partially offset the reported loss; warrant liabilities were $58.1 million at year-end.
At December 31, 2021, cash and cash equivalents were $321.8 million and restricted cash was $2.8 million, for total cash, cash equivalents and restricted cash of $324.5 million. Current assets were $335.8 million and current liabilities $21.4 million. Total liabilities were $92.0 million, including $58.1 million of warrant liabilities, $5.0 million of long-term debt and operating lease liabilities. Stockholders’ equity was $352.0 million. The company reported $416.9 million of net financing cash inflow in 2021, largely from the business combination.
Management said existing cash was expected to fund planned operations and capital spending for at least 12 months from the filing date. The company estimated capital investment of $260–$300 million for the first 20 BlueBird satellites and approximately $1.9 billion for the planned 168-satellite constellation; it expected to seek additional capital before commercial service.
Outlook, risks and unusual items
- Management targeted a summer 2022 launch of the BW3 test satellite, subject to completion of testing. It planned to begin launching commercial BlueBird satellites in 2023, reach substantial global mobile coverage after 110 satellites by the end of 2024, and add MIMO capabilities with 168 satellites during 2025. These are plans, not assurances.
- The filing stated that limited service might be possible after commercial satellite launches, with revenue expected only after commercial launch; management discussed potential revenue generation in certain locations beginning in 2024. Definitive commercial agreements, regulatory approvals, satellite performance and customer acceptance remain prerequisites.
- More than 20 preliminary MNO agreements and understandings were reported, covering approximately 1.8 billion subscribers; approximately 1.0 billion were covered by arrangements contemplating revenue sharing. Many arrangements require renewal and definitive contracts before service can be offered.
- Key risks include development delays and cost overruns, launch or in-orbit failures, the need for substantial additional financing, regulatory approval and spectrum access, dependence on MNOs and suppliers, competition, and uncertain customer demand. The FCC applications and approvals described in the filing were pending, and third parties had opposed or challenged aspects of the proposals.
- AST wrote off approximately $2.7 million of deposits for launch services with a Russian-headquartered entity, citing sanctions and its expectation that the services could not be used or refunded in the foreseeable future. A March 2022 SpaceX agreement followed year-end; the company reported paying $22.8 million for BW3 technical adjustments, the first BlueBird launch payment and a future launch reservation.
- The company reported no material litigation. It disclosed a possible $10 million penalty to Rakuten if specified launch-program KPIs are not met in the last two phases or certain insolvency events occur. The Tax Receivable Agreement requires payment of 85% of certain realized tax savings; no liability had been recorded at year-end because no relevant unit exchanges had occurred.
- Founder Abel Avellan and permitted transferees controlled approximately 88.3% of voting power as of the report date through the multi-class share structure. The filing also identified potential dilution from outstanding warrants and shares that could become available for resale after lock-up restrictions expired.
Important facts for investors to verify
- Current cash, cash burn and financing needs against the estimated $1.9 billion constellation investment and stated 12-month liquidity outlook.
- BW3 test results and launch status, and progress toward commercial satellite production and deployment milestones.
- Status of FCC and foreign regulatory approvals, spectrum access agreements, and definitive MNO commercial contracts and renewals.
- Whether reported partner subscriber coverage converts into signed agreements, service availability and paying customers.
- Warrant-liability valuation and its noncash earnings effects, plus potential share dilution from warrants, equity awards and AST LLC unit exchanges.
- Material contract conditions, including Rakuten KPIs and potential penalties, the Vodafone exclusivity terms, and obligations under the Tax Receivable Agreement.