AST SpaceMobile, Inc. — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing. Financial statements are audited under U.S. GAAP; the auditor issued an unqualified opinion.
Business context
AST SpaceMobile is developing a low-Earth-orbit satellite network intended to provide cellular broadband to standard, unmodified mobile phones through mobile network operator (MNO) partnerships. The service had not launched and generated no revenue through the reporting period. All FY 2022 revenue came from NanoAvionika, a former subsidiary sold on September 6, 2022; AST said it did not expect further revenue until SpaceMobile Service launches.
Financial performance and position
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | $13.8 million | $12.4 million |
| Gross profit / gross margin | $7.1 million / 51.5% | $4.8 million / 39.0% |
| Operating expenses | $152.9 million | $91.6 million |
| Net loss before noncontrolling-interest allocation | $103.1 million | $73.3 million |
| Net loss attributable to common stockholders | $31.6 million; $0.58 per Class A share | $30.6 million; $0.37 per Class A share |
| Cash used in operating activities | $156.5 million | $80.1 million |
Operating expenses rose 67%, reflecting increased engineering, R&D, headcount and corporate costs. The FY 2022 reported loss included $43.3 million of total other income, including a $19.1 million noncash gain from remeasurement of warrant liabilities and a $24.5 million gain on the Nano sale. These items offset operating losses and are not recurring SpaceMobile service revenue.
At December 31, 2022, cash and cash equivalents were $238.6 million, with $0.7 million restricted cash; total current assets were $268.3 million and current liabilities $27.8 million. Total assets were $438.4 million and total liabilities $78.5 million. Long-term debt was $4.8 million, with $0.2 million current; the $5.0 million term loan bears 4.20% interest and is secured by Texas property. Warrant liabilities were $38.9 million.
Cash, cash equivalents and restricted cash declined to $239.3 million from $324.5 million. Investing activities used $31.4 million; financing activities provided $102.3 million, primarily from equity issuance. The company reported $49.5 million of purchase commitments at year-end. It stated that cash on hand and access to its equity programs were expected to fund current needs for 12 months from the filing date, while estimating an additional $550–$650 million would be needed to fund development and operation of a 25-satellite constellation.
Material changes and notable items
- AST sold its 51% interest in Nano for net proceeds of $26.6 million and recorded a $24.5 million gain. Nano’s results were consolidated only through September 6, 2022.
- Operating cash use nearly doubled year over year, to $156.5 million, including $14.8 million in launch-provider deposits. Cash proceeds from equity programs and a public offering totaled approximately $102.0 million in FY 2022.
- BlueWalker 3 launched in September 2022 and deployed its communications array in orbit in November. Initial testing to connect with a standard cellular phone was ongoing as of March 31, 2023; the filing does not report that this milestone had been achieved.
- Reported FY 2021 per-share loss is not fully comparable: the filing says it covers only April 6–December 31, 2021, after the business combination.
Outlook, risks and contingencies
Management expected to launch five Block 1 BlueBird satellites in the first quarter of 2024 and planned to begin limited, noncontinuous service in selected areas after deployment and testing. The plan depends on completion of satellites, launch availability, funding, regulatory approvals and definitive MNO agreements. Block 2 launches were planned to begin in 2024; management described 25 satellites as the initial target for service in selected markets and approximately 95 for substantial service across all targeted areas. These are plans, not guaranteed outcomes.
- Funding and dilution: The company remains pre-revenue, expects continuing losses and may need substantial additional capital. Further equity financing could materially dilute existing holders; debt or commercial financing could impose restrictions or require concessions.
- Regulatory and partner dependencies: FCC and foreign approvals, access to MNO-licensed spectrum, and definitive commercial agreements are required. More than 35 MNO preliminary agreements and understandings were reported, but many may need renewal and do not replace definitive agreements. The U.S. FCC application faced support and opposition from third parties.
- Execution and technology: The filing cites prior BW3 launch delays, development costs above initial estimates and testing taking longer than expected. Satellite performance, launch, manufacturing, supply-chain, interference and in-orbit failure risks remain.
- Rakuten contingency: AST said it did not expect to meet specified Japan milestones by June 2023. Unless Rakuten agreed to amend or waive the requirement, a $10.0 million payment was expected; it could be made as a note bearing 8% interest. The outcome of discussions was not assured.
- Governance and capital structure: Founder and CEO Abel Avellan and permitted transferees controlled approximately 86.5% of voting power as of March 31, 2023. The multi-class structure limits other shareholders’ influence. Outstanding warrants and potential resales of shares are additional dilution and market-price considerations.
- Other matters: The company reported no material legal proceedings and no off-balance-sheet arrangements at year-end. A Delaware court validated the charter and specified securities retroactively in March 2023. Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2022; the auditor did not attest to internal-control effectiveness.
Important facts for investors to verify
- Whether BW3 completes cellular-broadband testing with standard phones, and what performance is demonstrated.
- Progress on Block 1 satellite production, SpaceX launch timing, and the projected 2024 service schedule.
- Cash burn, remaining liquidity, access to equity facilities, and financing required to reach the 25-satellite target.
- Whether the company secures definitive MNO agreements and required FCC and international approvals, including spectrum access.
- Resolution of the potential $10.0 million Rakuten payment, and any related note terms.
- Future share issuance, warrant exercises, and the effects of the controlled-company voting structure.