01—Abstract
Summary
Summary of the 10-K filed April 1, 2024. Cited figures are marked; the original filing is the authoritative source.
AST SpaceMobile (ASTS) is a pre-revenue company building a space-based cellular broadband network designed to connect standard, unmodified smartphones directly from low Earth orbit, with an initial plan for five Block 1 BlueBird satellites to launch in 2024 and a larger Block 2 constellation to follow.
For fiscal 2023 the company reported no revenue (versus $13.8 milliona in 2022, all from the since-sold Nano subsidiary), operating expenses of $222.4 million, and a net loss attributable to common stockholders of $87.6 million, with cumulative losses of about $189.7 million since inception. Cash and equivalents were $85.6 million at year-end 2023, and management estimated roughly $210.8 million of cash as of March 31, 2024 after January 2024 financings, which it believes will fund operations for the next 12 months. Total debt rose to about $71.8 million principal during 2023, including a 14.75% senior secured Atlas facility.
The filing's central investor question is funding and execution. Management estimates it needs $350 million to $400 millionb more to build 20 Block 2 satellites and operate a 25-satellite constellation, and the Block 1 launch has already slipped. The company's commercial model depends on definitive agreements with mobile network operators and on FCC approvals, several of which remain pending and opposed by competitors.
Control is also concentrated: CEO Abel Avellan holds about 81.5%c of combined voting power through Class C stock, and the company is a controlled company that relies on governance exemptions. The near-term catalysts are the Block 1 launch, the Block 2 first launch window (December 2024 to March 2025), definitive MNO and government contracts, and FCC rulings. Investors should weigh the significant technical and regulatory execution risk against the large addressable market and existing strategic partners such as AT&T, Vodafone, Google, and Rakuten.
02—Key points
Key Highlights
- No revenue in 2023; net loss attributable to common stockholders of $87.6M (EPS of -$1.07), up from $31.6M in 2022, driven by higher engineering services (+45% to $78.8M) and depreciation (up to $54.5M after BW3 test satellite depreciation began).
- Liquidity: $85.6M cash and equivalents at 12/31/2023; about $210.8M estimated at 3/31/2024 after $107.7M net January 2024 common stock proceeds and $110M convertible notes; management says this covers the next 12 months.
- Capital needs: estimated $350M–$400M additional capital required to build 20 Block 2 satellites and operate a 25-satellite constellation; long-term plan targets about 95 satellites, at an estimated $16M–$18M per Block 2 satellite.
- Strategic commercial agreements with AT&T ($20M prepaid service commitment), Vodafone ($25M revenue commitment and $25M convertible note), and Google, though these are letter agreements that still require definitive contracts.
- Regulatory dependency: FCC approval for the V-band NGSO system (248 satellites) and SCS service links remains pending and has been opposed by multiple competitors; no FCC authority yet for direct-to-handset service links.
- Governance and dilution: CEO Abel Avellan controls about 81.5% of combined voting power via Class C shares; the company is a Nasdaq controlled company; 17.6M warrants at $11.50 and 19.1M convertible-note shares at $5.75 create dilution potential.
- Schedule risk: Block 1 satellite completion was delayed by two supplier subsystem failures; transport to launch site is now expected July–August 2024, with the launch window to be determined.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed April 1, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $0$13.82M | −100.0% |
| Cost of Revenue | $0$6.71M | −100.0% |
| Gross Profit | $0$7.11M | −100.0% |
| R&D Expenses | $47.49M$45.62M | +4.1% |
| Operating Expenses | $222.37M$159.59M | +39.3% |
| Interest Expense | $4.50M$200K | +2150.0% |
| Net Income | -$87.56M-$31.64M | −176.7% |
| Shares Outstanding (Basic) | 81.82M— | — |
| Shares Outstanding (Diluted) | 81.82M— | — |
05—Questions
Frequently Asked Questions
Does AST SpaceMobile generate any revenue today?
No. The company reported zero revenue for 2023. Its only 2022 revenue ($13.8M) came from Nano, which was sold on September 6, 2022. The company expects its first revenue in 2024 from reselling gateway equipment and from milestones under a U.S. government prime contractor agreement, with SpaceMobile Service revenue to follow commercial launch and MNO agreements.
How much more capital will AST SpaceMobile need, and how might it raise it?
Management estimates it needs roughly $350M–$400M to fund Block 2 satellite production, launch, and operation of a 25-satellite constellation. It plans to raise funds through equity (including an ATM program and an equity line of credit with B. Riley), convertible or other debt, the remaining Atlas senior secured facility (subject to equity raises and insurance coverage), and commercial or government partner arrangements. Future raises could be substantially dilutive, and the filing notes that a failure to raise capital could lead to going-concern doubt.
What are the main risks to the Block 1 and Block 2 launch timelines?
Block 1 completion was already delayed due to supplier failures on two key subsystems, and the company has replaced one supplier and licensed the design of another for Block 2. Launches depend on third-party launch providers, regulatory approvals, weather, and logistics. The first Block 2 satellite is planned for a launch window of December 15, 2024 to March 31, 2025 and will use an FPGA chip before the custom ASIC is available. Launch insurance is expensive (3%–15% of insured value) and may not be fully purchased.
Who controls the company and what does that mean for public shareholders?
CEO and founder Abel Avellan, through his Class C shares, holds about 81.5% of combined voting power as of March 28, 2024. As a result, AST SpaceMobile is a Nasdaq controlled company and relies on exemptions from independent board and nominating committee requirements. Public Class A holders have limited ability to influence major decisions, including a change of control. The company also has a multi-class structure that may exclude it from some stock indices.
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