01—Abstract
Summary
Summary of the 10-K filed March 31, 2023. Cited figures are marked; the original filing is the authoritative source.
AST SpaceMobile's FY2022 10-K (filed March 31, 2023) describes a pre-revenue company building a space-based cellular broadband network intended to work with standard, unmodified smartphones through partnerships with mobile network operators (MNOs).
The company has no SpaceMobile Service revenue: it sold its 51% interest in Nano (satellite manufacturer) on September 6, 2022, which generated a $24.5 milliona one-time gain and was the source of all 2022 revenue ($13.8 million, all pre-sale). Operating expenses rose 67% to $152.9 million, driven by engineering services, G&A and R&D as headcount and BlueWalker 3 (BW3) and Block 1/Block 2 BlueBird satellite programs expanded. The net loss attributable to common stockholders was $31.6 million, but the consolidated net loss before noncontrolling interest was $103.1 million, with non-cash warrant remeasurement gains and the Nano gain cushioning results.
Cash fell to $239.3 millionb at year-end, with operating cash burn of $156.5 million, so the company will need to raise substantial additional capital. The key near-term catalysts are the planned launch of five Block 1 BlueBird satellites on SpaceX in Q1 2024, followed by limited noncontinuous service subject to regulatory approvals and definitive MNO agreements, which remain unsigned (only preliminary agreements with over 35 MNOs). Management estimates it needs $550–650 million more to launch 20 Block 2 satellites and operate a 25-satellite constellation, with a long-term goal of about 95 satellites.
Liquidity relies on a $75 millionc B. Riley equity line, a $150 million ATM program and prior offerings, and management believes this suffices for 12 months.
Investors should weigh significant risks: a controlled-company structure where CEO Abel Avellan holds about 86.5% of voting power, a potential $10.0 milliond Rakuten payment if KPIs are missed by June 2023 (management does not expect to meet them), a pending FCC V-band application with opposition from competitors, a Delaware Section 205 petition to validate the 2021 charter, and a history of cumulative losses of about $105 million. The BW3 test satellite has not yet achieved confirmed direct-to-unmodified-phone communications as of the filing date.
02—Key points
Key Highlights
- Pre-revenue status: no SpaceMobile Service revenue to date; 2022 revenue of $13.8M came entirely from Nano, sold September 6, 2022 for a $24.5M net gain, and no revenue is expected until service launches
- Operating expenses rose 67% to $152.9M in 2022 (engineering $54.2M, G&A $48.3M, R&D $45.6M), reflecting headcount growth and BlueBird satellite development
- Net loss attributable to common stockholders of $31.6M (vs. $30.6M in 2021), while consolidated net loss before noncontrolling interest was $103.1M; warrant remeasurement gains of $19.1M and the Nano gain offset losses
- Liquidity: $239.3M cash at 12/31/2022 vs. $324.5M a year earlier; operating cash burn of $156.5M in 2022; management believes funds suffice for 12 months, supplemented by a $75M equity line, a $150M ATM program and a $68.6M December 2022 offering
- Funding gap: estimated $550–650M needed to launch 20 Block 2 satellites and operate a 25-satellite constellation; long-term plan calls for about 95 satellites
- Commercial timeline: five Block 1 BlueBird satellites expected to launch in Q1 2024 on SpaceX; over 35 preliminary MNO agreements, with definitive agreements still required
- Governance and risk: CEO Abel Avellan controls about 86.5% of voting power via Class C shares; the company is a Nasdaq controlled company, and the Rakuten KPI miss could trigger a $10.0M liability in June 2023
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed March 31, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $13.82M$12.40M | +11.4% |
| Cost of Revenue | $6.71M$7.56M | −11.2% |
| Gross Profit | $7.11M$4.84M | +46.9% |
| R&D Expenses | $45.62M$23.44M | +94.6% |
| Operating Expenses | $159.59M$91.59M | +74.2% |
| Interest Expense | $200K— | — |
| Net Income | -$31.64M-$18.97M | −66.8% |
05—Questions
Frequently Asked Questions
When will AST SpaceMobile begin generating revenue?
Not before the planned launch of five Block 1 BlueBird satellites, currently targeted for Q1 2024. After deployment and testing, the company plans limited, noncontinuous service in targeted areas, but only after obtaining regulatory approvals in each jurisdiction and signing definitive agreements with MNOs. The 10-K warns that 2024 is the earliest revenue could begin.
How much additional capital will AST SpaceMobile need?
Management estimates $550–650 million to design, assemble and launch 20 Block 2 satellites and operate a 25-satellite constellation. The first five Block 1 satellites are estimated at $100–110 million, and each Block 2 satellite at $16–18 million. Funding is expected from equity, debt, secured loans, government or commercial partners, and there is no assurance such capital will be available on acceptable terms.
Does the company have control concerns for public shareholders?
Yes. Abel Avellan and his permitted transferees hold all Class C shares, giving them about 86.5% of combined voting power as of March 31, 2023. AST SpaceMobile qualifies as a Nasdaq controlled company and relies on exemptions from certain governance requirements, including the nominating committee independence requirement. Index providers such as S&P and FTSE Russell generally exclude multi-class share structures, which may limit demand for Class A shares.
What happened with the Nano sale and how does it affect results?
AST LLC sold its 51% stake in NanoAvionika to Kongsberg Defence & Aerospace for proceeds of $26.6 million net, recognizing a $24.5 million gain in 2022. Nano was the company's only revenue source, so it will generate no revenue going forward. The gain is non-recurring and helped reduce the reported net loss in 2022.
What are the main near-term risks investors should watch?
Key risks include: possible $10.0 million Rakuten payment if KPIs are not met by June 2023 (management does not expect to meet them, though renegotiation is possible); a pending FCC application for V-band market access, which faces opposition from competitors; the need for definitive MNO agreements to replace preliminary ones, many of which expire before launch; satellite launch and in-orbit failure risk; and the Delaware Section 205 petition to validate the 2021 charter and securities issued under it. Dilution from future equity raises is also a material risk.
06—Continue