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AST SpaceMobile, Inc.

AST SpaceMobile, Inc.ASTSEarnings & Financial Report

Nasdaq · space industry

AST SpaceMobile, Inc. is a publicly traded satellite designer and manufacturer based in Midland, Texas, United States. The company is building the SpaceMobile satellite constellation, a space-based cellular broadband network designed to connect directly to standard, unmodified smartphones. The network is intended to deliver 4G and 5G broadband coverage globally, particularly in remote and underserved regions.

What changed in AST SpaceMobile, Inc.'s 10-K — 2023 vs 2024

Top changes in AST SpaceMobile, Inc.'s 2024 10-K

586 paragraphs added · 537 removed · 364 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

104 edited+54 added−47 removed61 unchanged
We have invested a substantial amount in completing the design of the ASIC chip and we own the IP of our ASIC chip. We have entered into an agreement with a leading semiconductor manufacturer for tape-out and fabrication of our ASIC chip.
We have invested a substantial amount in completing the design of the ASIC chip and we own the IP of our ASIC chip. We entered into an agreement with a leading semiconductor manufacturer for tape-out and fabrication of our ASIC chip.
These include, but are not limited to, common carrier obligations; universal service obligations; rules governing billing and the pass through of third party charges, regulations governing subscriber privacy and customer proprietary network information; access to E911 and location accuracy requirements; roaming obligations; rules that require wireless service providers to configure their networks to facilitate electronic surveillance by law enforcement officials; emergency warning requirements; rules governing spam, telemarketing and truth-in-billing; outage reporting; open Internet and Net neutrality requirements; cybersecurity and rules requiring the offering of equipment and services that are accessible to and usable by persons with disabilities, among others.
These include, but are not limited to, common carrier obligations; universal service obligations; rules governing billing and the pass through of third party charges, regulations governing subscriber 8 privacy and customer proprietary network information; access to E911 and location accuracy requirements; roaming obligations; rules that require wireless service providers to configure their networks to facilitate electronic surveillance by law enforcement officials; emergency warning requirements; rules governing spam, telemarketing and truth-in-billing; outage reporting; open Internet and Net neutrality requirements; cybersecurity and rules requiring the offering of equipment and services that are accessible to and usable by persons with disabilities, among others.
Comprehensive Environmental Response, Compensation and 9 Liability Act of 1980, as amended (“CERCLA”), impose joint and several liability, without regard to fault, for cleanup costs on persons who disposed of or released hazardous substances into the environment, including at third-party sites or offsite disposal locations, or those who currently own or operate (or formerly owned or operated) sites where such a release occurred.
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“CERCLA”), impose joint and several liability, without regard to fault, for cleanup costs on persons who disposed of or released hazardous substances into the environment, including at third-party sites or offsite disposal locations, or those who currently own or operate (or formerly owned or operated) sites where such a release occurred.
Our custom developed ASIC chip is expected to enable materially greater throughput capacity, including peak data rates of up to 120 Mbps per individual spot beam when utilizing 40 MHz of spectrum and two-way back haul capacity which could utilize up to 10,000 MHz of spectrum per satellite, require less power and offer a significantly lower overall unit cost.
Our custom developed ASIC chip is expected to enable materially greater throughput capacity, including peak data rates of up to 120 Mbps per individual spot beam when utilizing 40 MHz of spectrum and two-way back haul capacity which could utilize up to 10,000 MHz of spectrum per 2 satellite, require less power and offer a significantly lower overall unit cost.
Item 1. Business Our Company We are building the first and only global Cellular Broadband network in space designed to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and other applications for government use utilizing our extensive intellectual property (“IP”) and patent portfolio.
Item 1. Business Our Company We are building the first and only global Cellular Broadband network in space to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and other applications for government use utilizing our extensive intellectual property (“IP”) and patent portfolio.
Under the agreement, American Tower will provide us leased space and managed services at its current and future tower sites and data centers under the global master lease agreements to be entered into by the parties. The usage of any American Tower services in a Vodafone market will be memorialized in a commercial agreement among all three parties.
Under the agreement, American Tower will provide us leased space and managed services at its current and future tower sites and data centers under the global master lease agreements to be entered into by the parties. 11 The usage of any American Tower services in a Vodafone market will be memorialized in a commercial agreement among all three parties.
Cost Advantages due to Greater Control of our Manufacturing: We believe that our significant investments in our manufacturing facilities and equipment, testing facilities including vibration and environment testing facilities, manufacturing processes, and supply chain provide us with a greater degree of control to manufacture our satellites in a timely manner and lower the overall 2 costs of our satellites.
Cost Advantages due to Greater Control of our Manufacturing: We believe that our significant investments in our manufacturing facilities and equipment, testing facilities including vibration and environment testing facilities, manufacturing processes, and supply chain provide us with a greater degree of control to manufacture our satellites in a timely manner and lower the overall costs of our satellites.
No payments have been made to date between us and American Tower under the Amended and Restated Letter Agreement. American Tower has the 11 right to designate one individual to our Board of Directors. Currently, American Tower’s designee is Ed Knapp, Chief Technology Officer, American Tower.
No payments have been made to date between us and American Tower under the Amended and Restated Letter Agreement. American Tower has the right to designate one individual to our Board of Directors. Currently, American Tower’s designee is Ed Knapp, Chief Technology Officer, American Tower.
The operation of SpaceMobile Service will require mobile traffic to be transmitted by our BB constellation and connected via high-throughput Q/V-band links to ground station gateways which will be collocated with the MNOs’ cellular network infrastructure.
The operation of SpaceMobile Service will require mobile traffic to be transmitted by our constellation of BB satellites and connected via high-throughput Q/V-band links to ground station gateways which will be collocated with the MNOs’ cellular network infrastructure.
Customers, Sales and Marketing We have developed relationships with companies, such as Vodafone, Rakuten, AT&T, Google, American Tower, and others that have innovative technologies and products, skilled personnel, and potential end-user customers that complement our strategy.
Customers, Sales and Marketing We have developed relationships with companies, such as Vodafone, Rakuten, AT&T, Verizon, Google, American Tower, and others that have innovative technologies and products, skilled personnel, and potential end-user customers that complement our strategy.
We 7 are required to comply with operational and coordination requirements set forth as conditions to the experimental license grant. Material changes to the experimental license testing parameters would require prior approval by the FCC.
We are required to comply with operational and coordination requirements set forth as conditions to the experimental license grant. Material changes to the experimental license testing parameters would require prior approval by the FCC.
Satellite design As part of our strategy, we aim to own and control the IP of all major sub systems of our BB satellites, and design and assemble our own constellation of BB satellites.
As part of our strategy, we aim to own and control the IP of all major sub systems of our BB satellites, and design and assemble our own constellation of BB satellites.
We provide access and make training and development programs available to our employees which include technical programs, regulatory and compliance, business communications and leadership development. We seek to attract a diverse population of employees by using a wide variety of recruiting platforms, such as online job portals, recruiters, in-person job fairs, local university training and recruitment programs, and employee referrals.
We provide access and make training and development programs available to our employees which include technical programs, regulatory and compliance, business communications and leadership development. We seek to attract employees by using a wide variety of recruiting platforms, such as online job portals, recruiters, in-person job fairs, local university training and recruitment programs, and employee referrals.
We anticipate launching and deploying additional satellites beyond the initial 95 satellites in order to enhance coverage and system capacity in response to incremental market demand. Continuous coverage is not expected to be available at all times in certain areas due to numerous factors, including number of active satellites in the region, latitude coverage range, and other factors.
We anticipate launching and deploying additional satellites beyond the initial 90 satellites in order to enhance coverage and system capacity in response to incremental market demand. Continuous coverage is not expected to be available at all times in certain areas due to numerous factors, including number of active satellites in the region, latitude coverage range, and other factors.
In addition, the SEC maintains a website ( www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically. 13
In addition, the SEC maintains a website ( www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically.
As such, we invest significant management attention, time and resources to attract, engage, develop and retain our talent. Our talent strategy focuses on our employee training and development, diversity and inclusion and the overall well-being and safety of our talent. We have ongoing training and development programs to enable employees to further refine and develop their skills.
As such, we invest significant management attention, time and resources to attract, engage, develop and retain our talent. Our talent strategy focuses on our employee training and development and the overall well-being and safety of our talent. We have ongoing training and development programs to enable employees to further refine and develop their skills.
Military and Government ● Service for military and governmental operations 5 We expect that the majority of our revenue will be generated from SpaceMobile Service offerings similar to those described above through revenue-sharing arrangements with MNOs; however, the ultimate offerings and pricing will be subject to mutual agreement with the MNOs and there can be no assurance as to what model any MNO ultimately offers its customers and the level of customer acceptance of these models.
Military and Government ● Service for military and governmental operations We expect that the majority of our revenue will be generated from SpaceMobile Service offerings, once available, similar to those described above through revenue-sharing arrangements with MNOs; however, the ultimate offerings and pricing will be subject to mutual agreement with the MNOs and there can be no assurance as to what model any MNO ultimately offers its customers and the level of customer acceptance of these models.
We intend to work with MNOs to offer the SpaceMobile Service to the MNOs’ end-user customers. Our vision is that users will not need to subscribe to the SpaceMobile Service directly through us, nor will they need to purchase any new or additional equipment or mobile device.
We intend to work with MNOs to offer the SpaceMobile Service to the MNOs’ end-user customers. Our vision is that users will not need to subscribe to the SpaceMobile Service directly through us, nor will they need to purchase any new or additional equipment.
We are headquartered in Texas where we operate 185,000 square feet of satellite assembly, integrating and testing (“AIT”) facilities and operate from multiple locations that include AIT and engineering and development locations elsewhere in the United States, India, Scotland, Spain and Israel.
We are headquartered in Texas where we operate 194,000 square feet of satellite assembly, integrating and testing (“AIT”) facilities and operate from multiple locations that include AIT and engineering and development locations elsewhere in the United States, India, Scotland, Spain and Israel.
If we and American Tower agree to construct a new carrier neutral hosting facility or improve an existing one and American Tower elects to fund all such capital expenditures, American Tower will provide AST with a fair-market, long-term lease to such facility.
If we and American Tower agree to construct a new carrier neutral hosting facility or improve an existing one and American Tower elects to fund all such capital expenditures, American Tower will provide us with a fair-market, long-term lease to such facility.
Government Regulations We are required to comply with the laws and regulations of, and often obtain approvals from, national and local authorities in connection with our services. As we launch service to additional countries and regions, we will become subject to additional governmental approvals and regulations.
Government Regulations We are required to comply with the laws and regulations of, and often obtain approvals from, national and local authorities in connection with our services. As we initiate service in additional countries and regions, we will become subject to additional governmental approvals and regulations.
Satellites must be operated in a manner consistent with the regulations and procedures of the International Telecommunication Union (“ITU”), a specialized agency of the United Nations, which require the coordination of the operation of satellite systems in certain circumstances, and more generally are intended to avoid the occurrence of harmful interference among different users of the radio spectrum.
Satellites must be operated in a manner consistent with the regulations and procedures of the International Telecommunication Union (“ITU”), a specialized agency of the United Nations, which require the coordination of the operation of satellite systems in certain circumstances, and more generally are intended to avoid the occurrence of harmful interference among different authorized uses of the radio spectrum.
We may adopt a strategy for commercial launch of the SpaceMobile Service, including the nature and type of services offered and the geographic areas where we may launch such services, that may differ materially from our current plan.
We may adopt a strategy for commercial launch of the SpaceMobile Service, including the nature and type of services offered and the geographic markets where we may launch such services, that may differ materially from our current plan.
We believe our large phased array design and custom ASIC chip together with our expansive and technologically diverse intellectual property portfolio consisting of 3,350 patent and patent pending claims, including innovations in the direct-to-cell satellite ecosystem from space to Earth, provide significant technological advantages to provide superior coverage and deliver high speed Cellular Broadband versus other direct to device satellite services.
We believe our large phased array design and custom ASIC chip together with our expansive and technologically diverse intellectual property portfolio consisting of more than 3,500 patent and patent pending claims, including innovations in the direct-to-cell satellite ecosystem from space to Earth, provide significant technological advantages to provide superior coverage and deliver high speed Cellular Broadband versus other direct to device satellite services.
We also will need to secure FCC authority in the future for the ground segment of the SpaceMobile Service, consisting of approximately four fixed earth stations located in the United States. Earth station licenses generally are granted for 15-year terms, and typically are renewed in the ordinary course.
We also will need to secure FCC authority in the future for the ground segment of the SpaceMobile Service, consisting of five fixed earth stations located in the United States. Earth station licenses generally are granted for 15-year terms, and typically are renewed in the ordinary course.
This prioritization of coverage is designed to minimize the capital required to initiate and operate commercial service that generates 4 cash flows from operating activities sooner.
This prioritization of coverage is designed to minimize the capital required to initiate and operate commercial service that generates cash flows from operating activities.
This technology eliminates the need to purchase expensive, specialized equipment or new mobile device or to carry antennas. Satellites Designed for Great Functionality, Power and Redundancy: Our satellites are designed to have the largest commercial phased array ever deployed in low earth orbit to provide high speed Cellular Broadband for commercial use.
This technology eliminates the need to purchase expensive, specialized equipment or new mobile device or to carry antennas. Satellites Designed for Great Functionality, Power and Redundancy: Our satellites are designed to have the largest commercial phased array ever deployed in LEO to provide high speed Cellular Broadband for commercial use.
We own the IP and control the manufacturing process either internally or through third-party contract manufacturers for approximately 95% of all the sub-systems that will be used in our Block 2 BB satellites.
We own the IP and control the manufacturing process either internally or through third-party contract manufacturers for approximately 95% of all the sub-systems used in our Block 2 BB satellites.
If we change the operational parameters of our satellites, we will need to file a supplemental application to modify our license with the FCC and obtain affirmative consent before undertaking such modifications.
If we further change the operational parameters of our satellites, we will need to file a supplemental application to modify our license with the FCC and obtain affirmative consent before undertaking such changes.
Our current plan is subject to numerous uncertainties, many of which are beyond our control, including satisfactory and timely completion of assembly and testing of the satellites, availability of launch windows by the launch providers, our ability to raise additional capital, proposed orbits and resulting satellite coverage, launch costs, ability to enter into agreements with MNOs, regulatory approvals, and other factors.
Our current plan is subject to numerous uncertainties, many of which are beyond our control, including satisfactory and timely completion of assembly and testing of the satellites, regulatory approvals, readiness of launch vehicles, availability of launch windows by the launch providers, logistics, our ability to raise additional capital for manufacturing of satellites and launch payments, proposed orbits and resulting satellite coverage, launch costs, ability to enter into agreements with MNOs and other factors, many of which are beyond our control.
We have experimental licenses with the FCC that permit the testing of the BW3 test satellite in LTE frequencies in multiple locations in the United States and permits the testing of V-band ground stations in Texas and Hawaii in connection therewith.
We have experimental licenses with the FCC that permit the testing of the BW3 test satellite and the Block 1 BB satellites in LTE frequencies in multiple locations in the United States and permits the testing of V-band ground stations with the BW3 in Texas and Hawaii in connection therewith.
Instead, users will be able to access the SpaceMobile Service when prompted on their mobile device that they are no longer within range of the land-based facilities of the MNO operator and will be able to purchase a plan directly with their existing mobile provider.
Instead, users will be able to access the SpaceMobile Service when prompted on their mobile device that they are no longer within range of the land-based facilities of the MNOs or will be able to purchase a plan directly with their existing mobile provider.
To this end, we have entered into an agreement with a prime contractor for the U.S. government to perform certain tasks and intend to seek to enter into other similar agreements with the U.S. government or prime contractors for the U.S government.
To this end, we have entered into agreements with prime contractors for the U.S. government to perform certain tasks and intend to seek to enter into other similar agreements with the U.S. government or prime contractors for the U.S government.
We will provide a number of services that rely on the use of radio-frequency spectrum, and the provision of such services is highly regulated.
We will provide several services that rely on the use of radio-frequency spectrum, and the provision of such services is highly regulated.
We believe our ASIC chip will enable materially greater throughput capacity of up to 40 MHz per beam to support up to 120 Mbps peak data rates and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a significantly lower overall unit cost.
We believe our ASIC chip, through our collaboration with a leading semiconductor design company, will enable materially greater throughput capacity of up to 40 MHz per beam to support up to 120 Mbps peak data rates and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a significantly lower overall unit cost.
We continuously aim to increase, where feasible, vertical integration for manufacturing of satellite components and subsystems at our AIT facilities to reduce our dependency on suppliers, ensure timely supply of satellite components and subsystems to meet our launch timeline, and lower the overall cost of BB satellites.
We continuously aim to increase, where feasible, vertical integration for manufacturing of satellite components and subsystems at our AIT facilities to reduce our dependency on suppliers, ensure timely supply of satellite components and subsystems to meet our launch timeline, and lower the overall cost of BB satellites. We have designed and developed our own ASIC chip.
According to Groupe Speciale Mobile Association (“GSMA”), as of December 31, 2023, approximately 5.6 billion mobile subscribers are constantly moving in and out of coverage, approximately 3.4 billion people have no cellular broadband coverage and approximately 400.0 million people have no connectivity or mobile cellular coverage.
According to Groupe Speciale Mobile Association (“GSMA”), as of December 31, 2024, approximately 5.8 billion mobile subscribers are constantly moving in and out of coverage, approximately 3.4 billion people have no cellular broadband coverage and approximately 350.0 million people have no connectivity or mobile cellular coverage.
We also make available on that website, and in print, if any stockholder or other person so requests, our “Code of Business Conduct and Ethics” applicable to all employees and Directors. Any changes to our Code of Ethics will be posted on that website.
We also make available on that website, and in print, if any stockholder or other person so requests, our “Code of Business Conduct and Ethics” applicable to all employees and Directors.
Cellular Broadband Directly to Unmodified Devices: Our large phased array, based on our innovative technology, is designed to provide high speed Cellular Broadband including voice, text, data and video services directly to any off-the-shelf and unmodified 2G/4G-LTE/5G mobile device using low and middle band cellular spectrum currently used by MNOs.
Cellular Broadband Directly to Unmodified Devices: Our large phased array, based on our innovative technology backed by more than 3,500 patent and patent pending claims, is designed to provide high speed Cellular Broadband including voice, text, data and video services directly to any off-the-shelf and unmodified 2G/4G-LTE/5G mobile device using low and mid-band cellular spectrum currently used by MNOs.
In certain cases where we have invested or co-invested in the design and development of satellite components and subsystems but do not own the IP design, we generally have contractual restrictions on the third party manufacturers prohibiting the use of these design, development, and manufacturing processes for certain number of years to supply the same or similar satellite components and subsystems to any other third parties.
In certain cases where we have invested or co-invested with our suppliers in the design and development of satellite components and subsystems but do not own the IP design and in cases where we select suppliers to manufacture our own custom designed components and subsystems, we generally have contractual restrictions on the suppliers prohibiting the use of these design, development, and manufacturing processes for certain number of years to supply the same or similar satellite components and 6 subsystems to any other third parties.
We generally make available the following benefits for our employees, including, but not limited to, a 401(k) retirement savings plan for our United States based employees, health insurance, flexible spending accounts, life insurance, long- and short-term disability, paid vacation, paid time off for holidays, sick time, and parental leave.
We generally make available the following benefits for our employees, including, but not limited to, a 401(k) retirement savings plan for our U.S. based employees, health insurance, flexible spending accounts, life insurance, long- and short-term disability, paid vacation, paid time off for holidays, sick time, and parental leave. We are committed to providing a safe working environment for our employees.
Our SpaceMobile Service is being designed to provide cost-effective, high-speed Cellular Broadband services to end-users who are out of terrestrial cellular coverage using existing mobile devices. The SpaceMobile Service currently is planned to be provided by a constellation of high-powered, large phased-array satellites in LEO using low band and middle band spectrum controlled by MNOs.
The SpaceMobile Service is being designed to provide cost-effective, high-speed Cellular Broadband services to end-users who are out of terrestrial cellular coverage using existing mobile devices. The SpaceMobile Service currently is planned to be provided by a constellation of high-powered, large phased-array satellites in low Earth orbit (“LEO”) using low-band and mid-band spectrum controlled by Mobile Network Operators (“MNOs”).
As a result of the incremental coverage created by the planned SpaceMobile Service, we believe that MNOs will have the opportunity to increase subscribers’ average revenue per user (“ARPU”) and enhance their return on invested capital.
As a result of the incremental coverage created by the planned SpaceMobile Service, we believe that MNOs will have the opportunity to increase subscribers’ average revenue per user (“ARPU”).
If we do not meet the launch and operation milestones set out in our grant, once obtained, we risk losing a portion of our surety bond for failure to meet all milestones.
If we do not meet the launch and operation milestones set out in our August 2024 grant of authority, we risk losing all or a portion of our surety bond for failure to meet such milestones.
Human Capital Management As of December 31, 2023, we had approximately 489 employees and consultants worldwide, which included approximately 272 employees and consultants in the U.S. and approximately 217 in other jurisdictions, primarily Scotland, Spain, India and Israel.
Human Capital Management As of December 31, 2024, we had approximately 578 employees and consultants worldwide, which included approximately 312 employees and consultants in the U.S. and approximately 266 in other jurisdictions, primarily Scotland, Spain, India and Israel.
We expect that, if approved, the FCC will apply routine conditions to a license grant authorizing launch and operation milestones for the NGSO satellite system that we must comply with.
We expect that, if approved, the FCC will apply routine conditions to a license grant authorizing further satellite launches for the revised NGSO satellite system that we must comply with.
Moreover, we have secured 9 granted international patents providing protection in 17 different countries, including Europe, Australia, Canada, India, Japan, and South Korea, and 4 patent applications in Australia and South Korea that have been indicated as allowable and ready for issue pending completion of patent office formalities.
We also have approximately 26 currently pending United States patent applications. Moreover, we have 19 granted international patents providing protection in 17 different countries, including Europe, Australia, Canada, India, Japan, and South Korea, and 6 that have been indicated as allowable and ready for issue pending completion of patent office formalities.
We are committed to providing a safe working environment for our employees. Our engineering and manufacturing facilities have injury prevention programs, and our procedures emphasize the need for the cause of injuries to be investigated and for action plans to be implemented to mitigate potential recurrence. Key Wireless Infrastructure Provider Relationships We have relationships with various wireless infrastructure providers.
Our engineering and manufacturing facilities have injury prevention programs, and our procedures emphasize the need for the cause of injuries to be investigated and for action plans to be implemented to mitigate potential recurrence. Key Wireless Infrastructure Provider Relationships We have relationships with various wireless infrastructure providers. A summary of certain commercial relationships with wireless infrastructure providers is below.
In comparison, the mobile satellite service LEOs are designed to support low data rate applications such as SOS, texting and in some instances, voice. We also compete with regional mobile satellite communications services in several geographic markets.
In comparison, the mobile satellite service LEOs offered by our existing competitors are designed to support low data rate applications such as SOS. We also compete with regional mobile satellite communications services in several geographic markets.
We encourage training and development of our employees and provide on-the-job training and online platforms and mandate training for all our employees on topics of diversity, equity and inclusion. Our success depends, in part, on our continuing ability to identify, hire, attract, train, develop, and maintain our employees’ well-being.
We encourage training and development of our employees and provide on-the-job training and online platforms. Our success depends, in part, on our continuing ability to identify, hire, attract, train, develop, and maintain our employees’ well-being. Our ability to hire, attract and retain employees depends on our ability to provide competitive total compensation.
None of our U.S. employees are subject to any collective bargaining agreement. Generally, each employee is required to sign a confidentiality, non-disclosure and non-use agreement with us. We have not experienced any work stoppages and consider our relations with our employees to be good.
None of our U.S. employees are subject to any collective bargaining agreement. Generally, each employee is required to sign a confidentiality, non-disclosure and non-use agreement with us.
We seek to align the interests of our employees and stockholders by providing long-term incentive programs such as awards of stock-based compensation to most of our employees.
Our compensation and benefit packages are designed to attract and retain employees and align the employees’ interests with our long-term success. We seek to align the interests of our employees and stockholders by providing long-term incentive programs such as awards of stock-based compensation to most of our employees.
The exact timing of this launch is contingent on a number of factors, including satisfactory and timely completion of the design, assembly and testing of the Block 2 BB satellite, regulatory approvals, availability of launch windows by the launch providers, logistics, and other factors, many of which are beyond our control.
The timing of shipment of the first Block 2 BB satellite is contingent on a number of factors including satisfactory and timely completion of the assembly and testing of the Block 2 BB satellite, regulatory approvals for the launch, readiness of the launch vehicle, logistics and other factors, many of which are beyond our control.
To date, we have secured 31 granted United States patents, one of which is exclusively licensed to us, and at least 4 United States patent applications that have been indicated as allowable and ready for issue pending completion of patent office formalities. We also have approximately 31 currently pending United States patent applications.
We have 36 patent families worldwide and to date, we have 45 granted United States patents (44 of which we own and one of which is exclusively licensed to us) and at least five United States patent applications that have been indicated as allowable and ready for issue pending completion of patent office formalities.
We believe the introduction of ASIC chip in our Block 2 BB satellites will enable materially greater throughput capacity of up to 40 MHz per beam to support 120 Mbps peak data rates and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a lower overall unit cost.
In addition, when we introduce our own AST5000 Application Specific Integrated Circuit (“ASIC”) chip in the Block 2 BB satellites, we expect to achieve materially greater throughput capacity of up to 40 MHz per beam to support 120 Mbps peak data rates and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a lower overall unit cost.
Also, Vodafone submitted a purchase order for network equipment from us to support planned commercial service. American Tower We and American Tower have entered into a side letter agreement that was subsequently amended and restated on December 15, 2020 to reflect the transactions and agreements contemplated by the Equity Purchase Agreement between us and New Providence Acquisition Corp.
American Tower We and American Tower have entered into a side letter agreement that was subsequently amended and restated on December 15, 2020 to reflect the transactions and agreements contemplated by the Equity Purchase Agreement between us and New Providence Acquisition Corp. (“NPA”) (the “Amended and Restated Letter Agreement”).
The Block 2 BB satellites are expected to be approximately 2,400 square feet in size, almost 3.5 times bigger than the Block 1 BB satellites, and will have the largest phased array ever deployed in a LEO for commercial use exceeding the phased array of the BW3 test satellite and planned Block 1 BB satellites.
Our Block 2 BB satellites are expected to be approximately 2,400 square feet in size and more than three times bigger than the communication array of the Block 1 BB satellites, which, by themselves, are the largest satellites in LEO. The Block 2 BB satellites will have the largest phased array ever deployed in a LEO for commercial use.
We believe we will benefit from the skills, technological expertise, and manufacturing know-how derived from the assembly and testing of our Block 1 BB satellite in the development and assembly of our Block 2 BB satellites. We began the design and development of the Block 2 BB satellites prior to the design and development of Block 1 BB satellites.
We are leveraging the technological expertise and manufacturing know-how derived from the assembly and testing of our Block 1 BB satellite in the development and assembly of our Block 2 BB satellites.
Our BB satellites are designed to be launched in a variety of launch vehicles. 3 Explore opportunities for variety of applications in government sector. We intend to leverage our patented technology, including large phased array and high power capability of our BB satellites, for a variety of applications in the government sector.
We intend to leverage our patented technology, including large phased array and high power capability of our BW3 test satellite and our BB satellites, for a variety of applications in the government sector.
Our engineering development activities primarily take place at development offices located in Maryland, Scotland, Spain, India and Israel as well as at our Texas assembly and testing facilities. In addition, we utilize third-party technology partners to assist in the development of our certain satellite technology.
Our design and development activities primarily take place in our engineering and development centers located in the United States, Scotland, Spain, India and Israel. In addition, we utilize third-party technology partners to assist in the development of certain satellite technology.
Our primary AIT facilities include approximately 185,000 square feet facilities in Texas for assembly and testing of our BB satellites, as well as an approximately 10,500 square foot facility in Spain for assembly and testing of avionics components and an approximately 33,000 square foot facility in Israel for assembly and testing of electronic components.
Our primary AIT facilities include approximately 194,000 square feet facilities in Texas for assembly and testing of our BB satellites, as well as an approximately 59,000 square foot new facility in Spain for assembly and testing of avionics and reliability components which will replace the existing 10,500 square foot facility when the lease ends in April 2025, and an approximately 33,000 square foot facility in Israel for assembly and testing of electronic components.
Material changes in earth station operations would require prior approval by the FCC. The operation of our earth stations is subject to various license conditions, as well as the technical and operational requirements of the FCC’s rules and regulations.
The operation of our earth stations is subject to various license conditions, as well as the technical and operational requirements of the FCC’s rules and regulations.
Satellite deployment and coverage plans We are developing a phased satellite deployment plan and corresponding commercial launch plan of the SpaceMobile Service based on targeted geographical areas to provide the SpaceMobile Service to the most commercially attractive MNO markets.
Until we introduce our ASIC chip in Block 2 BB satellites, we expect to continue to manufacture and launch Block 2 BB satellites that are based on a FPGA chip. 4 Satellite deployment and coverage plans We are developing a phased satellite deployment plan and corresponding commercial launch plan of the SpaceMobile Service based on targeted geographical areas to provide the SpaceMobile Service to the most commercially attractive MNO markets.
We also seek to maintain our trade secrets and confidential information through nondisclosure policies, the use of appropriate confidentiality agreements and other security measures. We maintain IP infringement enforcement and defense insurance (current coverage of $7.0 million for defending infringement claims and $10.0 million to bring offensive infringement claims).
We also seek to maintain our trade secrets and confidential information through nondisclosure policies, the use of appropriate confidentiality agreements and other security measures. We maintain IP infringement enforcement and defense insurance and plan to vigorously defend any infringement of our IP.
Competition The mobile satellite services industry at-large is highly competitive but has significant barriers to entry, including the cost and difficulty associated with successfully developing, building and launching a satellite network and obtaining various governmental and regulatory approvals.
In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as the laws of the United States. 9 Competition The mobile satellite services industry at-large is highly competitive but has significant barriers to entry, including the cost and difficulty associated with successfully developing, building and launching a satellite network and obtaining various governmental and regulatory approvals.
We protect our innovations by filing numerous patent applications and intellectual property registrations in the United States (“U.S.”) and worldwide. We own most of the intellectual property we use. We also systematically monitor and review potential infringements on our intellectual property. Focus on United States Manufacturing and Intellectual Property Development Activities .
We protect our innovations by filing numerous patent applications and intellectual property registrations in the U.S. and worldwide. We own most of the intellectual property we use. We also systematically monitor and review potential infringements on our intellectual property. Developing Relationships with Multiple Launch Vehicle Providers.
We have made significant capital investments in buildings and equipment at our AIT facilities to manufacture satellite components at our facilities; streamline the assembly, integration and testing processes for BB satellites; and conduct various testing of satellites including vibration and environment testing at our facilities.
We have made, and are continuing to make, significant capital investments in buildings and equipment both at our AIT facilities and at certain suppliers to increase the capacity to manufacture satellite components to reach our target capacity of assembling, integrating, and testing six BB satellites per month by the second quarter of 2025; streamline the assembly, integration and testing processes for BB satellites; and conduct various testing of satellites including vibration and environment testing at our facilities.
Because the SpaceMobile Service will communicate with end users using satellites transmitting on spectrum traditionally licensed to MNOs, in the U.S. we also will need the approval of the FCC’s Wireless Telecommunications Bureau, which handles terrestrial wireless licensing. We have a lease agreement with AT&T, Inc.
Because the SpaceMobile Service will communicate with end users employing personal/portable cellular devices serving as mobile earth stations transmitting on spectrum traditionally licensed to MNOs, in the U.S. we also will need the approval of the FCC’s Wireless Telecommunications Bureau, which handles terrestrial wireless licensing.
The Block 1 BB satellites will be of similar size and weight to the BW3 test satellite, includes our own designed array solar panels and battery systems, and will have ten times higher throughput than the BW3 test satellite.
The Block 1 BB satellites are of similar size and weight to the BW3 test satellite and have ten times higher throughput than the BW3 test satellite.
We expect that the MNOs will market and sell the enhanced coverage of the SpaceMobile Service directly to their customers and offer the service at a differentiated price to the current terrestrial coverage using the following illustrative service offerings, among others.
We will need to execute definitive commercial agreements with those MNOs that will supersede the preliminary agreements and understandings before we can offer our SpaceMobile Service in jurisdictions where they operate. 5 We expect that the MNOs will market and sell the enhanced coverage of the SpaceMobile Service directly to their customers and offer the service at a differentiated price to the current terrestrial coverage using the following illustrative service offerings, among others.
The FCC is responsible for authorizing the operation of commercial spacecraft, and also authorizes non-U.S. licensed spacecraft to be used to serve the United States. The FCC also licenses the operation of satellite earth stations and regulates the technical and other aspects of the operation of these facilities.
The FCC is responsible for authorizing the operation of U.S. registered commercial spacecraft, and also authorizes non-U.S. licensed spacecraft to serve the United States.
Google AST LLC has entered into a letter agreement on January 16, 2024 with Google, LLC (“Google”) whereby the parties will negotiate and execute a definitive agreement to provide, among other things, certain services to each other and have agreed to collaborate on product development, testing and implementation plans for SpaceMobile network connectivity on Android devices. 12 Available Information Our Company's internet website address is www.ast-science.com.
Currently, AT&T’s designee is Keith Larson, a long-time Intel executive with deep expertise in corporate development and corporate governance. 12 Google AST LLC entered into a letter agreement on January 16, 2024 with Google, LLC (“Google”) whereby the parties will negotiate and execute a definitive agreement to provide, among other things, certain services to each other and have agreed to collaborate on product development, testing and implementation plans for SpaceMobile network connectivity on Android devices (such agreement, the “Services Agreement”).
We are working on developing strategic relationships with multiple launch vehicle providers both in the United States and outside the United States to secure launch contracts that would meet both our target launch cost and our planned launch timelines for the BB constellation.
We have entered into agreements with multiple launch vehicle providers to secure launch contracts that meet our planned launch timelines for the initial BB constellation. In addition, 3 we are continuing to develop strategic relationships with additional launch vehicle providers both in the United States and outside the United States for cost effective future launches.
The exact timing of this launch is contingent on a number of factors, including satisfactory and timely completion of the design, assembly and testing of the Block 2 BB satellite, regulatory approvals, availability of launch windows by the launch providers, logistics, and other factors, many of which are beyond our control.
The timing of shipment of the first Block 2 BB satellite is contingent upon a number of factors including satisfactory completion of the testing of the Block 2 BB satellite, receipt of necessary regulatory approvals for the launch, readiness of the launch vehicle, logistics and other factors, many of which are beyond our control.
(“NPA”) (the “Amended and Restated Letter Agreement”). The Amended and Restated Letter Agreement contemplates that we and American Tower will enter into commercial agreements to allow us to use American Tower facilities for our terrestrial gateway facilities in certain markets.
The Amended and Restated Letter Agreement contemplates that we and American Tower will enter into commercial agreements to allow us to use American Tower facilities for our terrestrial gateway facilities in certain markets. The term of the operational agreement between us and American Tower is for an anticipated five years after the initial launch of commercial mobile services by us.
We conduct a majority of our engineering development activities by utilizing our global engineering team of space scientists and consultants to work with us on various aspects of our satellite system development efforts.
We conduct a majority of our satellite design and development activities by utilizing our global engineering team, including space scientists, mechanical and electronics engineers, semi-conductor engineers, RF and communications engineers, software developers, system engineers, and consultants on various aspects of our satellite system development efforts.
We intend to continue testing capabilities of the BW3 test satellite, including further testing with cellular service providers and devices. We are currently in the advanced stages of assembling and testing our first generation of commercial BB satellites (“Block 1 BB satellites”).
We intend to continue testing capabilities of the BW3 test satellite, including further testing with cellular service providers and the U.S. government. We launched five first generation commercial BB satellites (“Block 1 BB satellites”) on September 12, 2024.
We are also seeking regulatory approval for fixed earth stations in other jurisdictions around the world to operate satellite earth stations in connection with our service, including in connection with BW3 testing. Also, we are seeking regulatory approval to permit the commercial operation of our satellites using V-band and cellular frequencies in foreign jurisdictions where we intend to operate.
We are also seeking regulatory approval for fixed earth stations in other jurisdictions around the world to operate satellite earth stations in connection with our service, including in connection with evaluation of the Block 1 BB satellites.
We consider our talent to be very important to our operations and execution of our business strategy as well as the overall success of our business. Our key human capital objectives in managing our business include attracting, developing and retaining top talent, while integrating diversity, equity and inclusion principles and practices into our core values.
We have not experienced any work stoppages and consider our relations with our employees to be good. 10 We consider our talent to be very important to our operations and execution of our business strategy as well as the overall success of our business. Our key human capital objectives in managing our business include attracting, developing and retaining top talent.
We utilize a range of domestic and international contract manufacturers and vendors to manufacture specific components, subsystems, software and other electronic components used in our BB satellites. Some components, subsystems and services necessary for the assembly of our satellites are currently obtained from a sole source supplier or a limited group of suppliers.
We utilize a range of domestic and international contract manufacturers and vendors to manufacture specific components, subsystems, software and other electronic components used in our BB satellites.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Design, assembly and launch of satellite systems are highly complex and historically have been subject to frequent delays and cost over-runs. For example, the BW3 launch was delayed, the BW3 development costs exceeded initial estimates and BW3 testing took longer than expected; launch of Block 1 BB satellites was delayed.
Design, assembly and launch of satellite systems are highly complex and historically have been subject to frequent delays and cost over-runs. For example, the BW3 launch was delayed, the BW3 development costs exceeded initial estimates, BW3 testing took longer than expected, and the launch of Block 1 BB satellites was delayed.
Our potential profitability is dependent upon the successful development and successful commercial introduction and acceptance of SpaceMobile Service, which may not occur. Even if we are able to successfully develop our SpaceMobile Service, there can be no assurance that it will be commercially successful and become profitable on a sustained basis, if at all.
Our potential profitability is dependent upon the successful development and successful commercial introduction and acceptance of the SpaceMobile Service, which may not occur. Even if we are able to successfully develop the SpaceMobile Service, there can be no assurance that it will be commercially successful and become profitable on a sustained basis, if at all.
As a result of competition, we may not be able to successfully launch our SpaceMobile Service or products, retain our customers and attract new customers. We face competition from existing and potential competitors in the telecommunications industry, including terrestrial and satellite-based network systems.
As a result of competition, we may not be able to successfully launch the SpaceMobile Service or products, retain our customers and attract new customers. We face competition from existing and potential competitors in the telecommunications industry, including terrestrial and satellite-based network systems.
Operating in foreign countries poses substantial risks, including : • difficulties in developing products and services that are tailored to the needs of local customers; • unavailability of, or difficulties in establishing, relationships with local MNOs; • instability of international economies and governments, including geopolitical conflicts, acts of hostility or war; • changes in laws and policies affecting trade and investment in other jurisdictions, • exposure to varying legal standards, including data privacy, security and intellectual property protection in other jurisdictions; • difficulties in obtaining required regulatory authorizations; • difficulties in enforcing legal rights in other jurisdictions; • local domestic ownership requirements; • requirements that certain operational activities be performed in-country; • changing and conflicting national and local regulatory requirements; • foreign currency exchange rates and exchange controls; and • ongoing compliance with the U.S.
Operating in foreign countries poses substantial risks, including: • difficulties in developing products and services that are tailored to the needs of local customers; • unavailability of, or difficulties in establishing, relationships with local MNOs; • instability of international economies and governments, including geopolitical conflicts, acts of hostility or war; • changes in laws and policies affecting trade and investment in other jurisdictions, • exposure to varying legal standards, including data privacy, security and intellectual property protection; • difficulties in obtaining required regulatory authorizations; • difficulties in enforcing legal rights; • local domestic ownership requirements; • requirements that certain operational activities be performed in-country; • changing and conflicting national and local regulatory requirements; • foreign currency exchange rates and exchange controls; and • ongoing compliance with the U.S.
If the magnitude or frequency of such problems occur repeatedly, we may no longer able to provide a commercially acceptable level of service, our business and financial results and reputation would be harmed and our ability to pursue our business plan would be compromised.
If the magnitude or frequency of such problems occur repeatedly, we may no longer be able to provide a commercially acceptable level of service, our business and financial results and reputation would be harmed and our ability to pursue our business plan would be compromised.
Our customized hardware and software may be difficult and expensive to service, upgrade or replace. Some of the hardware and software we use in operating our SpaceMobile Service is significantly customized and tailored to meet our requirements and specifications and could be difficult and expensive to service, upgrade or replace.
Our customized hardware and software may be difficult and expensive to service, upgrade or replace. Some of the hardware and software we use in operating the SpaceMobile Service is significantly customized and tailored to meet our requirements and specifications and could be difficult and expensive to service, upgrade or replace.
Our satellites may collide with space debris or another spacecraft, which could adversely affect the performance of our SpaceMobile Service.
Our satellites may collide with space debris or another spacecraft, which could adversely affect the performance of the SpaceMobile Service.
Our failure to provide services in accordance with the terms of our licenses or our failure to operate our satellites or ground stations as required by our licenses and applicable laws and government regulations could result in the imposition of government sanctions and/or monetary fines, including the suspension or cancellation of our licenses.
Our failure to provide services in accordance with the terms of our licenses or our failure to operate our satellites or ground stations as required by our licenses and applicable laws and government regulations could result in the imposition of government sanctions, including the suspension or cancellation of our licenses and/or monetary fines.
The success of our business plan is dependent on a number of factors outside of our control, including: • the ability to maintain the functionality, capacity and control of the SpaceMobile Service and satellite network once launched; • the ability to access MNO or other spectrum on suitable terms to us; • the level of market acceptance and demand for our products and services from MNOs and their end-user customers; • the ability to introduce products and services that satisfy market demand; • the ability to comply with all applicable regulatory requirements in the countries in which we plan to operate; • the effectiveness of competitors in developing and offering similar services and products; • consumer acceptance of initial phases of the SpaceMobile Service which is not expected to provide continuous service; 16 • the ability to find third parties to successfully launch our satellites; and • the ability to maintain competitive prices for our products and services and to control our expenses.
The success of our business plan is dependent on a number of factors outside of our control, including: • our ability to maintain the functionality, capacity and control of the SpaceMobile Service and satellite network once launched; • the ability to access MNO or other spectrum on suitable terms to us; • the level of market acceptance and demand for our products and services from MNOs and their end-user customers; • the ability to introduce products and services that satisfy market demand; • the ability to comply with all applicable regulatory requirements in the countries in which we plan to operate; • the effectiveness of competitors in developing and offering similar services and products; • consumer acceptance of initial phases of the SpaceMobile Service which is not expected to provide continuous service; • the ability to find third parties to successfully launch our satellites; and • the ability to maintain competitive prices for our products and services and to control our expenses.
Development of the SpaceMobile Service, which is utilizing new technology, may continue to suffer from delays, interruptions or increased costs due to many factors, some of which may be beyond our control, including: • the failure of the SpaceMobile Service to work as expected as a result of technological or manufacturing and assembling difficulties, design issues or other unforeseen matters; • lower than anticipated demand and acceptance for the SpaceMobile Service and mobile satellite services in general; • the inability to obtain capital in the public and private markets to finance the SpaceMobile Service and related infrastructure, products and services on acceptable terms or at all; • engineering and/or manufacturing performance failing or falling below expected levels of output or efficiency; • denial or delays in receipt of regulatory approvals or non-compliance with conditions imposed by regulatory authorities; • the breakdown or failure of equipment or systems; • the inability to reach commercially viable agreements with launch providers that can accommodate the technical specifications of our satellites, proposed orbits and resulting satellite coverage, and proposed launch timing; • launch costs which may exceed our estimates; • non-performance by third-party contractors or suppliers; • the inability to develop or license necessary technology on commercially reasonable terms or at all; • launch delays or failures or deployment failures or in-orbit satellite failures once launched; • the inability to reach commercially viable cooperative agreements to license spectrum with one or more MNOs; • the inability to negotiate agreements with mobile network operators relating to the SpaceMobile Service that would supersede memoranda of understanding; • labor disputes or disruptions in labor productivity or the unavailability of skilled labor; • increases in the costs of materials or services, including due to inflation; • changes in project scope; • increased competition including competitors who may have more resources than we do; • additional requirements imposed by changes in laws or regulations; • geopolitical events, such as the outbreak of war or hostilities, as well as related sanctions and other trade restrictions; • pandemics, epidemics or other global public health events; or 14 • severe weather or catastrophic events such as fires, earthquakes, storms (including space storms and adverse weather in space) or explosions.
Development of the SpaceMobile Service, which is utilizing new technology, may continue to suffer from delays, interruptions or increased costs due to many factors, some of which may be beyond our control, including: • the failure of the SpaceMobile Service to work as expected as a result of technological or manufacturing and assembling difficulties, design issues or other unforeseen matters; • lower than anticipated demand and acceptance for the SpaceMobile Service and mobile satellite services in general; • our inability to obtain capital in the public and private markets to finance the SpaceMobile Service and related infrastructure, products and services on acceptable terms or at all; • engineering and/or manufacturing performance failing or falling below expected levels of output or efficiency; • denial or delays in receipt of regulatory approvals or non-compliance with conditions imposed by regulatory authorities; • the breakdown or failure of equipment or systems; • the inability to reach commercially viable agreements with launch providers that can accommodate the technical specifications of our satellites, proposed orbits and resulting satellite coverage, and proposed launch timing; • launch costs which may exceed our estimates; • non-performance by third-party contractors or suppliers; 15 • the inability to develop or license necessary technology on commercially reasonable terms or at all; • launch delays or failures or deployment failures or in-orbit satellite failures once launched; • the inability to reach commercially viable cooperative agreements to license spectrum with one or more MNOs; • the inability to negotiate agreements with mobile network operators relating to the SpaceMobile Service that would supersede memoranda of understanding; • labor disputes or disruptions in labor productivity or the unavailability of skilled labor; • increases in the costs of materials or services, including due to inflation; • changes in project scope; • increased competition including competitors that may have more resources than we do; • additional requirements imposed by changes in laws or regulations; • geopolitical events, such as the outbreak of war or hostilities, as well as related sanctions and other trade restrictions; • pandemics, epidemics or other global public health events; or • severe weather or catastrophic events such as fires, earthquakes, storms (including space storms and adverse weather in space) or explosions.
Beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria.
Likewise, beginning in 2017, MSCI, a leading stock index provider, opened public consultations on their treatment of no-vote and multi-class structures and temporarily barred new multi-class listings from certain of its indices; however, in October 2018, MSCI announced its decision to include equity securities “with unequal voting structures” in its indices and to launch a new index that specifically includes voting rights in its eligibility criteria.
Recently, there have been reported a number of significant, widespread security attacks and breaches that have compromised network integrity for many companies and governmental agencies, in some cases reportedly originating from outside the United States. Also, there are reportedly private products available in the market today which may attempt to unlawfully intercept communications made using our network.
Recently, there have been reported a number of significant, widespread security attacks and breaches that have compromised network integrity for many companies and governmental agencies, in some cases reportedly originating from outside the United States. Also, there are reportedly private products available in the market today that may attempt to unlawfully intercept communications made using our network.
Satellite service providers or others that rely on satellites for their business purposes and end markets, including us, face a currently challenging industry as evidenced by the past bankruptcies of OneWeb and Intelsat. The provision of satellite-based services and products is subject to downward price pressure when capacity exceeds demand.
Satellite service providers or others that rely on satellites for their business purposes and end markets, including us, face a challenging industry as evidenced by the past bankruptcies of OneWeb and Intelsat. The provision of satellite-based services and products is subject to downward price pressure when capacity exceeds demand.
For us to keep pace with technological changes and remain competitive, we may need to make significant capital expenditures, including capital to design and launch new products and services. Customer acceptance of the products and services that we offer may be affected continually by technology-based differences in product and service offerings compared to those of competitors.
For us to keep pace with technological changes and remain competitive, we may need to make significant capital expenditures, including capital to design and launch new products and services. Customer acceptance of the products and services that we offer may be affected continually by technology-based differences in our product and service offerings compared to those of competitors.
We may face competition in the future from companies using new technologies and new satellite systems, including competitors who may have more resources than we do. New technology could render the planned SpaceMobile Service obsolete or less competitive by satisfying customer demand in more attractive ways or through the introduction of incompatible standards.
We may face competition in the future from companies using new technologies and new satellite systems, including competitors who may have more resources than we do. New technology could render the SpaceMobile Service obsolete or less competitive by satisfying customer demand in more attractive ways or through the introduction of incompatible standards.
We may pursue acquisitions, joint ventures or other strategic transactions from time to time. We may face costs and risks arising from any such transactions, including integrating a new business into our business or managing a joint venture. These risks may include adverse legal, organizational and financial consequences, loss of key customers and distributors, and diversion of management’s time.
We may pursue acquisitions, joint ventures or other strategic transactions from time to time. We may face costs and risks arising from any such transactions, including integrating a new business into our business or managing a joint venture. These risks could include adverse legal, organizational and financial consequences, loss of key customers and distributors, and diversion of management’s time.
Although we would not incur any direct cash costs related to the failure of a satellite, if a satellite fails, we would expect to record an impairment charge in our statement of operations to reduce the remaining net book value of that satellite to zero, and any such impairment charges could depress our net income for the period in which the failure occurs.
Although we would not incur any direct cash costs related to the failure of a satellite, if a satellite fails, we would expect to record an impairment charge in our statement of operations to reduce the remaining net book value of that satellite to zero, and any such impairment charges could reduce our net income for the period in which the failure occurs.
Additionally, some space debris is too small to be tracked and therefore its orbital location is unknown; nevertheless, this debris is still large enough to potentially cause severe damage or a failure of our satellites should a collision occur. If our satellites collide with space debris or other spacecraft, our SpaceMobile Service could be impaired.
Additionally, some space debris is too small to be tracked and therefore its orbital location is unknown; nevertheless, this debris is still large enough to potentially cause severe damage or a failure of our satellites should a collision occur. If our satellites collide with space debris or other spacecraft, the SpaceMobile Service could be impaired.
While we believe our SpaceMobile Service will be able to avoid such interference through our patented technology, because the SpaceMobile Service is a new and innovative service that has not yet been implemented, the nature, extent and effectiveness of these interference avoidance techniques, and their effect on the service we will deliver, remains to be practically proven.
While we believe the SpaceMobile Service will be able to avoid such interference through our patented technology, because the SpaceMobile Service is a new and innovative service that has not yet been fully implemented, the nature, extent and effectiveness of these interference avoidance techniques, and their effect on the service we will deliver, remains to be practically proven.
The mobile satellite services industry at-large is highly competitive, and we currently face substantial general competition from other service providers that offer a range of mobile and fixed communications options. There are also a number of competitors working to develop innovative solutions to compete in this industry.
The mobile satellite services industry at-large is highly competitive, and we face substantial general competition from other service providers that offer a range of mobile and fixed communications options. There are also a number of competitors working to develop innovative solutions to compete in this industry.
Our satellites have a limited life and may fail prematurely, which would cause our network to be compromised and materially and adversely affect our business, prospects and potential profitability. We may experience in-orbit malfunctions of our satellites once launched, which could adversely affect the reliability of their service or result in total failure of the satellite.
Our satellites have a limited life and may fail prematurely, which could cause our network to be compromised and materially and adversely affect our business, prospects and potential profitability. We may experience in-orbit malfunctions of our satellites once launched, which could adversely affect the reliability of their service or result in total failure of the satellite.
There can be no assurance that we can reach suitable cooperative agreements with MNOs or that such agreements will continue for the life of the SpaceMobile Service. The shared use of the terrestrial broadband spectrum by us and the MNO will require the implementation of procedures and safeguards to avoid interference to other users.
There can be no assurance that we can reach suitable cooperative agreements with MNOs or that such agreements will continue for the life of the SpaceMobile Service. The shared use of the terrestrial broadband spectrum by us and the MNO will require the implementation of procedures and safeguards to avoid harmful interference to other users.
Pursuant to the Tax Receivable Agreement, we are generally required to pay the TRA Holders (as defined in the Tax Receivable Agreement) 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that we and any applicable consolidated, unitary, or combined Subsidiaries (the “Tax Group”) realize, or are deemed to realize, as a result of certain “Tax Attributes”, which include: • existing tax basis in certain assets of AST LLC and certain of its direct or indirect Subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service, attributable to AST Common Units acquired by us from a TRA Holder (including AST Common Units held by a Blocker Corporation (as defined in the Tax Receivable Agreement) acquired by us in a Reorganization Transaction (as defined in the Tax Receivable Agreement)), each as determined at the time of the relevant acquisition; • tax basis adjustments resulting from taxable exchanges of AST Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by us from a TRA Holder pursuant to the terms of the A&R Operating Agreement; • tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement; and • certain tax attributes of Blocker Corporations holding AST Common Units that are acquired directly or indirectly by us pursuant to a Reorganization Transaction.
Pursuant to the Tax Receivable Agreement (“TRA”), we are generally required to pay the TRA Holders (as defined in the Tax Receivable Agreement) 85% of the amount of savings, if any, in U.S. federal, state, local, and foreign taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that we and any applicable consolidated, unitary, or combined Subsidiaries (the “Tax Group”) realize, or are deemed to realize, as a result of certain “Tax Attributes,” which include: • existing tax basis in certain assets of AST LLC and certain of its direct or indirect Subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service, attributable to AST Common Units acquired by us from a TRA Holder (including AST Common Units held by a Blocker Corporation (as defined in the Tax Receivable Agreement) acquired by us in a Reorganization Transaction (as defined in the Tax Receivable Agreement)), each as determined at the time of the relevant acquisition; • tax basis adjustments resulting from taxable exchanges of AST Common Units (including any such adjustments resulting from certain payments made by us under the Tax Receivable Agreement) acquired by us from a TRA Holder pursuant to the terms of the A&R Operating Agreement; • tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement; and • certain tax attributes of Blocker Corporations holding AST Common Units that are acquired directly or indirectly by us pursuant to a Reorganization Transaction.
Reduced demand could cause a significant delay in the launch of our satellites or the development of the SpaceMobile Service which in turn could cause a decline in our anticipated future revenue and make it more difficult to operate profitably in the future, potentially compromising our ability to pursue our business plan.
Reduced demand could cause a significant delay in the launch of our satellites or the development of the SpaceMobile Service which in turn could cause a decline in our 22 anticipated future revenue and make it more difficult to operate profitably in the future, potentially compromising our ability to pursue our business plan.
Following the launch of the SpaceMobile Service in international markets, our international operations will be sensitive to currency exchange risks. We anticipate having currency exposure arising from both sales and purchases denominated in foreign currencies, as well as intercompany transactions.
Following the anticipated launch of the SpaceMobile Service in international markets, our international operations will be sensitive to currency exchange risks. We anticipate having currency exposure arising from both sales and purchases denominated in foreign currencies, as well as intercompany transactions.
While many of the factors that will determine the amount of payments that we will be required to make under the TRA are outside of our control, we expect that the aggregate payments we will be required to make under the TRA could be substantial and could have an adverse effect on our financial condition, which may be material.
While many of the factors that will determine the amount of payments that we will be required to make under the TRA are outside of our control, we expect that the aggregate payments we will be required to make under the TRA could be substantial and could have an adverse effect on our financial condition, which could be material.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of our Board of Directors consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) director nominees be selected or recommended to the board by independent directors. 27 We rely on certain of these exemptions.
Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirement that (i) a majority of our Board of Directors consist of independent directors, (ii) we have a compensation committee that is composed entirely of independent directors and (iii) director nominees be selected or recommended to the board by independent directors. 29 We rely on certain of these exemptions.
Rather, any excess payments made to such TRA Holders will be applied against and reduce any future cash payments otherwise required to be made by us to the applicable TRA Holders under the Tax Receivable Agreement, after the determination of such excess.
Rather, any excess payments made to such TRA Holders will be applied against and reduce any future cash payments otherwise required to be made by us to the applicable TRA Holders under 31 the Tax Receivable Agreement, after the determination of such excess.
The lump-sum payment could be material and could materially exceed any actual tax benefits that the Tax Group realizes subsequent to such payment. 30 Payments under the TRA will be our obligations and not obligations of AST LLC.
The lump-sum payment could be material and could materially exceed any actual tax benefits that the Tax Group realizes subsequent to such payment. Payments under the TRA will be our obligations and not obligations of AST LLC.
In some markets, we compete directly or indirectly with very small aperture terminal operators that offer communications services through private networks using very small aperture terminals or hybrid systems to target business users.
In some markets, we compete directly or indirectly with very small aperture terminal operators that offer communications services 20 through private networks using very small aperture terminals or hybrid systems to target business users.
Avellan and his permitted transferees hold all of the Class C Common Stock, which prior to the Sunset Date will entitle such holders to cast the lesser of 10 votes per share and the Class C Share Voting Amount, the latter of which is a number of votes per share equal to (1) (x) an amount of votes equal to 88.3% of the total voting power of our outstanding voting stock, minus (y) the total voting power of our outstanding capital stock (other than Class C Common Stock) owned or controlled by Mr.
Avellan and his permitted transferees hold all of the Class C Common Stock, which prior to the Sunset Date will entitle such holders to cast the lesser of 10 votes per share and the Class C Share Voting Amount, the latter of which is a number of votes per share equal to (1) (x) an amount of votes equal to 88.31% of the total voting power of our outstanding voting stock, minus (y) the total voting power of our outstanding capital stock (other than Class C Common Stock) owned or controlled by Mr.
Although we will have some ability to remedy some types of problems affecting the performance of satellites remotely from the ground, the physical repair of our satellites in space is not feasible.
Although we will have some ability to remedy some types of problems affecting the performance of satellites remotely from the ground, the physical repair of our satellites in space is not currently feasible.
As a result of the recurring fair value measurement, our consolidated financial statements and results of operations may fluctuate quarterly, based on factors which are outside of our control.
As a result of the recurring fair value measurement, our consolidated financial statements and results of operations may fluctuate quarterly, based on factors 37 which are outside of our control.
However, the measures we take to protect our intellectual property from unauthorized use by others may not be effective for various reasons, including the following: • any patent applications we submit may not result in the issuance of patents; 23 • the scope of our issued patents, including our patent claims, may not be broad enough to protect our proprietary rights; • our issued patents may be challenged or invalidated by our competitors; • our employees or business partners may breach their confidentiality, non-disclosure and non-use obligations to us; • third parties may independently develop technologies that are the same or similar to ours; • the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make enforcement impracticable; and • current and future competitors may circumvent our intellectual property.
However, the measures we take to protect our intellectual property from unauthorized use by others may not be effective for various reasons, including: • any patent applications we submit may not result in the issuance of patents; 25 • the scope of our issued patents, including our patent claims, may not be broad enough to protect our proprietary rights; • our issued patents may be challenged or invalidated by our competitors; • our employees or business partners may breach their confidentiality, non-disclosure and non-use obligations to us; • third parties may independently develop technologies that are the same or similar to ours; • the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make enforcement impracticable; and • current and future competitors may circumvent our intellectual property.
It is also possible that insurance could become unavailable, either generally or for a specific launch vehicle, or that new insurance could be subject to broader exclusions on coverage, in which event we would bear the risk of launch failures. 22 Our satellites may experience operational problems, which could affect our ability to provide an acceptable level of service to the end-user customers.
It is also possible that insurance could become unavailable, either generally or for a specific launch vehicle, or that new insurance could be subject to broader exclusions on coverage, in which event we would bear the risk of launch failures. 24 Our satellites may experience operational problems, which could affect our ability to provide an acceptable level of service to the end-user customers.
Should operational risks materialize, it may result in the monetary losses, delays, unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all which could have a material adverse effect on our business, prospects, financial condition or operating results. We face substantial risks associated with our international operations.
Should operational risks materialize, it could result in the monetary losses, delays, unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all of which could have a material adverse effect on our business, prospects, financial condition or operating results. We face substantial risks associated with our international operations.
The inability to offer or provide the SpaceMobile Service in certain markets could impair us from achieving our revenue and growth plans. 26 We expect to provide our SpaceMobile Service in the U.S. and elsewhere on frequencies not regularly allocated for mobile-satellite service, which requires regulatory approval, and there can be no assurance that we will receive or be able to maintain such approval.
The inability to offer or provide the SpaceMobile Service in certain markets could impair us from achieving our revenue and growth plans. 28 We expect to provide the SpaceMobile Service in the U.S. and elsewhere on frequencies not regularly allocated for mobile-satellite service, which requires regulatory approval, and there can be no assurance that we will receive or be able to maintain such approval.
Our ability to become profitable in the future will not only depend on our ability to successfully launch satellites and build the SpaceMobile Service, but also to control costs.
Our ability to become profitable in the future will not only depend on our ability to successfully launch additional satellites and build the SpaceMobile Service, but also our ability to control costs.
A future on-payment outcome in a legal proceeding could have an adverse impact on our business, financial condition and results of operations. Also, current and future litigation, regardless of its merits, could result in substantial legal fees, settlement or judgment costs and a diversion of management’s attention and resources that are needed to successfully run our business.
A future negative outcome in a legal proceeding could have an adverse impact on our business, financial condition and results of operations. Also, current and future litigation, regardless of its merits, could result in substantial legal fees, settlement or judgment costs and a diversion of management’s attention and resources that are needed to successfully run our business.
Regulatory changes, such as those resulting from judicial decisions or the adoption of treaties, legislation or regulations in countries where we operate or intend to operate may also significantly affect our business. Our ability to offer one or more services in important countries or regions of the world may be limited due to regulatory requirements or geopolitical events.
Regulatory changes, such as those resulting from judicial decisions or the adoption of treaties, legislation or regulations in countries where we operate or intend to operate could also significantly affect our business. Our ability to offer one or more services in important countries or regions of the world could be limited due to regulatory requirements or geopolitical events.
Although satellite communications services and terrestrial communications services are not perfect substitutes, the two compete in some markets and for some services and this competition may increase if the SpaceMobile Service proves successful. Consumers generally perceive terrestrial wireless voice communication products and services as less expensive and more convenient than those that are satellite-based.
Although satellite communications services and terrestrial communications services are not perfect substitutes, the two compete in some markets and for some services and this competition could increase if the SpaceMobile Service proves successful. Consumers generally perceive terrestrial wireless voice communication products and services as less expensive and more convenient than those that are satellite-based.
If any of our suppliers terminate their relationships with us, fail to provide equipment or services on a timely basis, or fail to meet performance expectations, we may be unable to launch satellites in a timely manner or provide products or services to customers in a competitive manner, which could in turn negatively affect our financial results and reputation.
If our suppliers terminate their relationships with us, fail to provide equipment or services on a timely basis, or fail to meet performance expectations, we may be unable to launch satellites in a timely manner or provide products or services to customers in a competitive manner, which could in turn negatively affect our financial results and reputation.
Also, any major business combination or similar strategic transaction may require significant additional financing. Further, depending on market conditions, investor perceptions of us and other factors, we might not be able to obtain financing on acceptable terms, in acceptable amounts, or at appropriate times to implement any such transaction.
Also, any major business combination or similar strategic transaction could require significant additional financing. Further, depending on market conditions, investor perceptions of us and other factors, we may not be able to obtain financing on acceptable terms, in acceptable amounts, or at appropriate times to implement any such transaction.
There are also no assurances that we will be able to secure future business with, or to convert existing memoranda of understanding into definitive commercial agreements with, MNOs, who are in turn expected to market and sell the SpaceMobile Service to their existing customers as the end-user.
There are also no assurances that we will be able to secure future business, or to convert existing memoranda of understanding into definitive commercial agreements, with MNOs who are in turn expected to market and sell the SpaceMobile Service to their existing customers as the end users.
Also, our competitors may design around our issued patents, which may adversely affect our business, prospects, financial condition and operating results. We may in the future become subject to claims that our satellites or services violate the patent or intellectual property rights of others, which could be costly and disruptive to us.
Also, our competitors may design around our issued patents, which could adversely affect our business, prospects, financial condition and operating results. We may become subject to claims that our satellites or services violate the patent or intellectual property rights of others, which could be costly and disruptive to us.
This concentrated control may have the effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and might ultimately affect the market price of shares of our Class A Common Stock.
This concentrated control could have the effect of delaying, preventing or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and could ultimately affect the market price of shares of our Class A Common Stock.
Any payments made by us under the TRA will generally reduce the amount of overall cash flow that might have otherwise been available to us. To the extent that we are unable to make timely payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid.
Any payments made by us under the TRA will generally reduce the amount of overall cash flow that may have otherwise been available to us. To the extent that we are unable to make timely payments under the TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid.
As a result, we do not have a nominating and corporate governance committee consisting entirely of independent directors and our directors were not nominated or selected solely by independent directors. We may also rely on the other exemptions so long as we qualify as a controlled company.
As a result, we do not have a nominating and corporate governance committee consisting entirely of independent directors and our directors were not nominated or selected solely by independent directors. We may also elect to rely on the other exemptions so long as we qualify as a controlled company.
If another party has filed a patent application to the same subject matter as we have, we may not be entitled to the protection sought by the patent application. We also cannot be certain whether the claims included in a patent application will ultimately be allowed in the applicable issued patent.
If another party has filed a patent application with respect to the same subject matter as we have, we may not be entitled to the protection sought by the patent application. We also cannot be certain whether the claims included in a patent application will ultimately be allowed in the applicable issued patent.
If we are not able to suitably service, upgrade or replace our equipment, our ability to provide our services and therefore to generate revenue could be harmed. 24 Our networks and those of our third-party service providers and MNOs may be vulnerable to security risks.
If we are not able to suitably service, upgrade or replace our equipment, our ability to provide our services and therefore to generate revenue could be harmed. 26 Our networks and those of our third-party service providers and MNOs may be vulnerable to security risks.
Although we expect to comply with best practices and international orbital debris mitigation requirements to actively maneuver our satellites to avoid potential collisions with space debris or other spacecraft, including an onboard propulsion system and altitude and orbit control system, these abilities are limited by, among other factors, uncertainties and inaccuracies in the projected orbit location of, and predicted collisions with, debris objects tracked and cataloged by governments or other entities.
Although we comply with, and expect to continue to comply with, best practices and international orbital debris mitigation requirements to actively maneuver our satellites to avoid potential collisions with space debris or other spacecraft, including an onboard propulsion system and altitude and orbit control system, these abilities are limited by uncertainties and inaccuracies in the projected orbit location of, and predicted collisions with, debris objects tracked and cataloged by governments or other entities.
As a result, there might not be future cash payments against which such excess can be applied and we could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.
As a result, there may not be future cash payments against which such excess can be applied, and we could be required to make payments under the Tax Receivable Agreement in excess of the Tax Group’s actual savings in respect of the Tax Attributes.
Our Atlas Credit Agreement, Term Loan Credit Agreement, and Lone Star Loan Agreement contain, and any future indebtedness of ours would likely contain, a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to, among other things: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions or repurchase or redeem capital stock; • prepay, redeem or repurchase certain debt; • issue certain preferred stock or similar equity securities; • make loans and investments; • sell assets; • incur liens; • enter into transactions with affiliates; • materially alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of our assets.
Our Term Loan Credit Agreement and Lone Star Loan Agreement contain, and any future indebtedness of ours may contain, a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions or repurchase or redeem capital stock; • prepay, redeem or repurchase certain debt; • issue certain preferred stock or similar equity securities; • make loans and investments; • sell assets; • incur liens; • enter into transactions with affiliates; • materially alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of our assets.
Our ability to provide SpaceMobile Service may be limited in some jurisdictions by local regulations. For example, some countries have local domestic ownership requirements, or requirements for physical facilities or gateways within their jurisdictions, that may be difficult for us to satisfy.
Our ability to provide the SpaceMobile Service could be limited in some jurisdictions by local regulations. For example, some countries have local domestic ownership requirements, or requirements for physical facilities or gateways within their jurisdictions, that may be difficult for us to satisfy.
New technologies may also be protected by patents or other intellectual property laws and therefore may not be available. Any failure to implement new technology within our SpaceMobile Service may compromise our ability to compete. If we fail to manage our future growth effectively, our business, prospects, operating results and financial condition may be materially adversely affected.
New technologies may also be protected by patents or other intellectual property laws and therefore may not be available. Any failure to implement new technology within the SpaceMobile Service may compromise our ability to compete. 19 If we fail to manage our future growth effectively, our business, prospects, operating results and financial condition could be materially adversely affected.
Also, production or logistics in supply or production areas or transit to final destinations can be disrupted for a variety of reasons including, but not limited to, natural and man-made disasters, information technology system failures, transportation difficulties, commercial disputes, military actions, economic, business, labor, environmental, public health or political issues or international trade disputes.
Also, production or logistics in supply or production areas or transit to final destinations can be disrupted for a variety of reasons, including natural and man-made disasters, information technology system failures, transportation difficulties, commercial disputes, military actions, economic, business, labor, environmental, public health or political issues or international trade disputes.
In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or on-payment research or issue an adverse opinion regarding our stock price, our stock price could decline.
In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate research or issue an adverse opinion regarding our stock price, our stock price could decline.
There are a limited number of third parties with the capabilities to launch our satellites, some of which are exploring services that could compete with the SpaceMobile Service. Also, we may not be able to operate our satellites successfully due to mechanical deployment failures after launch or problems occurring during the deployment once in space.
There are a limited number of third parties with the capabilities to launch our satellites, some of which have launched services that could compete with the SpaceMobile Service. Also, we may not be able to operate our satellites successfully due to mechanical deployment failures after launch or problems occurring during the deployment once in space.
We rely on third parties to launch our satellites. If we fail to find third parties to launch our satellites or if the third parties fail to perform or delay their performance, the SpaceMobile Service may not be made operational in the anticipated timeframe or at all.
If we fail to find third parties to launch our satellites or if the third parties fail to perform or delay their performance, the SpaceMobile Service may not be made operational in the anticipated timeframe or at all.
However, AST LLC’s ability to make such distributions may be subject to various limitations and restrictions, including, but not limited to, retention of amounts necessary to satisfy the obligations of AST LLC and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in AST LLC’s debt agreements, or any applicable law, or that would have the effect of rendering AST LLC insolvent.
However, AST LLC’s ability to make such distributions may be subject to various limitations and restrictions, including retention of amounts necessary to satisfy the obligations of AST LLC and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in AST LLC’s debt agreements, or any applicable law, or that would have the effect of rendering AST LLC insolvent.
As a result, included on our consolidated balance sheets as of December 31, 2023 and 2022 contained elsewhere in this report are derivative liabilities related to embedded features contained within our warrants.
As a result, included on our consolidated balance sheets as of December 31, 2024 and 2023 contained elsewhere in this report are derivative liabilities related to embedded features contained within our warrants.
We expect our future growth rate will be affected by the condition of the global economy, increased competition, maturation of the satellite communications industry, and the difficulty in sustaining high growth rates as we increase in size. 20 Pursuing strategic transactions may cause us to incur additional risks.
We expect our future growth rate will be affected by the condition of the global economy, increased competition, maturation of the satellite communications industry, and the difficulty in sustaining high growth rates as we increase in size. Pursuing strategic transactions could cause us to incur additional risks.
Our access to this spectrum will be subject to approval or notification by the regulatory licensing authority, and any such approval or notification may be delayed or rejected, which may substantially affect our business.
Our access to this spectrum will be subject to approval or notification by the regulatory licensing authority, and any such approval or notification could be delayed or rejected, which could substantially affect our business.
Because our satellites are based on a different technology platform than traditional LEO satellites, individuals with sufficient training in our technology may not be available to hire, and as a result, we will need to expend significant time and expense training the employees it does hire.
Because our satellites are based on a different technology platform than traditional LEO satellites, individuals with sufficient training in our technology may not be available to hire, and as a result, we will need to expend significant time and expense training the employees we do hire.
In order to execute our business plans, we will need a substantial amount of capital in the near term and in the future to further our business plan and develop the SpaceMobile Service, including expenses to: • design, develop, assemble, integrate, test and launch our Block 2 BB satellites; • design and develop the components of the SpaceMobile Service; • purchase direct materials and components; • expand our AIT facilities and production capabilities; and • support satellite and network operations.
In order to execute our business plans, we will need a substantial amount of capital to further our business plan and develop the SpaceMobile Service, including capital to: • design, develop, assemble, integrate, test and launch our Block 2 BB satellites; • design and develop the components of the SpaceMobile Service; • purchase direct materials and components; • expand our AIT facilities and production capabilities; and • support satellite and network operations.
Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
Such a default could allow the creditors to accelerate the related debt and could result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
Additionally, nonpayment for a specified period and/or under certain circumstances may constitute a material breach of a material obligation under the TRA and therefore accelerate payments due under the TRA.
Additionally, nonpayment for a specified period and/or under certain circumstances could constitute a material breach of a material obligation under the TRA and therefore accelerate payments due under the TRA.
Government regulators have adopted a broad array of regulations governing the terms and conditions of wireless service designed to protect consumers and the public interest. While our arrangements with the MNOs will address some of these requirements, these regulatory obligations may prove burdensome and could have an adverse effect on our business.
Government regulators have adopted a broad array of regulations governing the terms and conditions of commercial mobile radio service designed to protect consumers and the public interest. While our arrangements with the MNOs will address some of these requirements, these regulatory obligations may prove burdensome and could have an adverse effect on our business.
Some of these competitors, as well as other existing companies that may seek to enter the markets we serve, may be larger amounts of capital and other resources, have access to financing and capital resources on more advantageous terms, and may provide more efficient products or services than we will be able to provide, any of which could reduce our market share and adversely affect our revenues and business. 18 We will be dependent on third parties to market and sell our products and services.
Some of these competitors, as well as other existing companies that may seek to enter the markets we serve, may have larger amounts of capital and other resources, have access to financing and capital resources on more advantageous terms, and provide more efficient products or services than we will be able to provide, any of which could reduce our market share and adversely affect our revenues and business.
Our business may be adversely affected if we are unable to protect our intellectual property rights from unauthorized use by third parties.
Our business could be adversely affected if we are unable to protect our intellectual property rights from unauthorized use by third parties.
We rely on third parties for the supply of equipment, satellite components and services. Our business depends in large part on our ability to execute our plans to assemble, integrate and test our satellites and components. We rely on multiple suppliers to supply and produce certain highly-technical components.
We rely on third parties for the supply of equipment, satellite components and services. Our business depends in large part on our ability to execute our plans to assemble, integrate and test our satellites and components. We rely on a limited number of suppliers to supply and produce certain highly-technical components.
A breach of the covenants or restrictions under the Atlas Credit Agreement, Term Loan Credit Agreement, Lone Star Loan Agreement, and Notes (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Overview”) could result in an event of default under the applicable agreement.
A breach of the covenants or restrictions under the Term Loan Credit Agreement, Lone Star Loan Agreement, and the 2032 Convertible Notes (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of 23 Operations-Overview”) could result in an event of default under the applicable agreement.
There can be no assurance that we will be able to raise additional funds when needed or on favorable terms or at all. If we cannot raise additional funds when needed, our independent auditors or management may express substantial doubt about our ability to continue as a going concern in future financial statements.
There can be no assurance that we will be able to raise additional funds when needed or on favorable terms or at all. If we cannot raise additional funds when needed, our independent registered public accounting firm or management may express substantial doubt about our ability to continue as a going concern in future financial statements.
Avellan and his permitted transferees holdings, control approximately 81.5% of the combined voting power of our Common Stock, and may control a majority of our voting power so long as the Class C Common Stock represents at least 9.1% of our total Common Stock. As a result of Mr.
Avellan and his permitted transferees holdings, control approximately 76.6% of the combined voting power of our Common Stock, and may control a majority of our voting power so long as the Class C Common Stock represents at least 9.1% of our total Common Stock. As a result of Mr.
Given the substantial capital needs of our business and business plans, any such dilution may be substantial. If we are unable to raise additional capital in the future, it may result in our independent auditors or management expressing substantial doubt about our ability to continue as a going concern in future financial statements.
Given the substantial capital needs of our business and business plans, any such dilution may be substantial. If we are unable to raise additional capital in the future, it may result in our independent registered public accounting firm or management expressing substantial doubt about our ability to continue as a going concern in future financial statements.
Risks Related to Our Organizational Structure We are a “controlled company” within the meaning of the Nasdaq listing standards and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements. As of March 28, 2024, Mr.
Risks Related to Our Organizational Structure We are a “controlled company” within the meaning of the Nasdaq listing standards and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements. As of February 27, 2025, Mr.
Avellan, attract and retain key employees and hire qualified management, technical and engineering personnel, our ability to compete could be harmed. Our success depends, in part, on our ability to retain our key personnel. We are highly dependent on the services of Abel Avellan, our founder, Chairman and Chief Executive Officer. Mr.
Avellan, attract and retain key employees and hire qualified management, technical and engineering personnel, our business could be adversely affected. Our success depends, in part, on our ability to retain our key personnel. We are highly dependent on the services of Abel Avellan, our founder, Chairman and Chief Executive Officer. Mr.
Our ownership and operation of a satellite communications system and the sale of services from such system are subject to significant regulation in the United States, including by the FCC, the U.S. Department of Commerce and others, and in foreign jurisdictions by similar local authorities.
Our ownership and operation of a satellite communications system and the sale of services from such system are subject to significant regulation in the United States, including by the FCC, the U.S. Department of Commerce and others, and in foreign jurisdictions by similar local authorities as well as the International Telecommunications Union.
Also, a failure of one or more of our satellites or the occurrence of equipment failures, collision damage, or other related problems that may result during the de-orbiting process could constitute an uninsured loss and could materially harm our financial condition. 25 Risks Related to Our Legal and Regulatory Matters Our business is subject to extensive government regulation worldwide, which mandates how we may operate our business and may increase the cost of providing services and expansion into new markets.
Also, a failure of one or more of our satellites or the occurrence of equipment failures, collision damage, or other related problems could constitute an uninsured loss and could materially harm our financial condition. 27 Risks Related to Our Legal and Regulatory Matters Our business is subject to extensive government regulation worldwide, which mandates how we may operate our business and may increase the cost of providing services and expansion into new markets.
The development of a satellite-based Cellular Broadband network and related intellectual property is a speculative undertaking, involves a substantial degree of risk, is a capital-intensive business and may ultimately fail. If we cannot successfully execute our plan to develop a Cellular Broadband network from LEO satellites, referred to as SpaceMobile Service, our business will not succeed.
The development of a satellite-based Cellular Broadband network and related intellectual property is a speculative undertaking, involves a substantial degree of risk, is a capital-intensive business and may ultimately fail. If we cannot successfully execute our plan to develop the SpaceMobile Service, our business may not succeed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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For further details on cybersecurity risks, please refer to the Risk Factors discussion in Item 1A of this Report, including the discussion under the heading “Cyberattacks impacting our networks or systems may have a material effect on our operations.” 37 Governance of cybersecurity risk management Our Board of Directors, acting through the Audit Committee, is responsible for overseeing management’s implementation and execution of the risk management process, including our cybersecurity risk management strategy and processes.
For further details on cybersecurity risks, please refer to the Risk Factors discussion in Item 1A of this Annual Report, including the discussion under the heading “Cyberattacks impacting our networks or systems may have a material effect on our operations.” Governance of cybersecurity risk management Our Board of Directors, acting through the Audit Committee, is responsible for overseeing management’s implementation and execution of the risk management process, including our cybersecurity risk management strategy and processes.
As of December 31, 2023, we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected or are reasonably likely to materially affect our business strategy, financial condition or results of operations.
As of December 31, 2024 , we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected or are reasonably likely to materially affect our business strategy, financial condition or results of operations.
The CSIRT core team engages with third party experts and cross-functional CSIRT members, as required, to manage the cybersecurity incidents. Cybersecurity incidents that are potentially significant or could result in a material impact are reported to the CSIRT Executive team, consisting of designated executives of the Company.
Cybersecurity incidents that are potentially significant or could result in a material impact are reported to the CSIRT Executive team , consisting of designated executives of the Company.
The CSIRT core team, consisting of the information technology team, classifies detected cybersecurity incidents into one of three categories based on potential impact to the functionality of the affected systems, possible or known information involved and recoverability effort. The classification of cybersecurity incidents is designed to allow rapid prioritization, response and escalation.
The CSIRT core team, consisting of the information technology team with substantial relevant experience in designing and managing our information technology infrastructure and system, classifies detected cybersecurity incidents into one of three 38 categories based on potential impact to the functionality of the affected systems, possible or known information involved and recoverability effort.
Added
The classification of cybersecurity incidents is designed to allow rapid prioritization, response and escalation. The CSIRT core team engages with third party experts and cross-functional CSIRT members, as required, to manage the cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

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Property Location Leased / Owned Assembly, Integration and Testing Facility (100,000 square feet) Midland, Texas Owned Assembly, Integration and Testing Facility (85,000 square feet) Midland, Texas Leased Engineering and Development Center Lanham, Maryland Leased Office Miami, Florida Leased Engineering and Development Center Israel Leased Engineering and Development Center Spain Leased Engineering and Development Center United Kingdom Leased Research and Development Center India Leased
Property Location Leased / Owned Assembly, Integration and Testing Facility Midland, Texas Owned Assembly, Integration and Testing Facility Midland, Texas Leased Engineering and Development Center Lanham, Maryland Leased Office Miami, Florida Leased Engineering, Development and Production Center Israel Leased Engineering, Development and Production Center Spain Leased Engineering and Development Center United Kingdom Leased Engineering and Development Center India Leased The facilities owned or leased and operated by us are maintained in good condition.
Added
In addition to these facilities, we are actively negotiating additional leases of production facilities to increase our manufacturing, assembly, integration, and testing capacity to six Block 2 BB satellites per month to meet our planned launches in 2025 and 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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C. § 220, two stockholders have filed putative class action complaints in the Delaware Court of Chancery against the Company, certain current and former directors of the Company and its predecessor entity and manager, New Providence Acquisition Corp. and New Providence Management LLC, and Abel Avellan, alleging claims of breach of fiduciary duties and aiding and abetting such breaches, relating to the de-SPAC merger.
C. § 220, two stockholders filed putative class action complaints in the Delaware Court of Chancery against the Company, certain current and former directors and officers of the Company and its predecessor entity and manager, New Providence Acquisition Corp. and New Providence Management LLC, and Abel Avellan, alleging claims of breach of fiduciary duties, aiding and abetting such breaches, and unjust enrichment, relating to the de-SPAC merger.
Refer to Note 10: Commitments and Contingencies in the accompanying notes to the consolidated financial statements for further information. 38 Delaware Class Action Litigations Following books and records demands pursuant to 8 Del.
Refer to Note 9 Commitments and Contingencies in the accompanying notes to the consolidated financial statements for further information. Delaware Class Action Litigations Following books and records demands pursuant to 8 Del.
Removed
The first of those complaints, Taylor v. Coleman, et al. (C.A. No. 2023-1292), was filed on December 27, 2023, and the second, Drulias v. New Providence Management LLC, et al., was filed on March 29, 2024 (collectively, the “Delaware Stockholder Class Actions”). Both complaints seek equitable relief and unspecified monetary damages.
Added
On February 11, 2025, Plaintiffs filed a notice voluntarily dismissing the complaints. Federal Class Action Litigations The Company and certain of its current executive officers have been named as defendants in a putative stockholder class action lawsuit pending in the United States District Court for the Western District of Texas. The action is styled Klarkowski v.
Removed
On March 15, 2024, prior to the filing of the Drulias action, Defendants had moved to dismiss the Taylor action. No schedule has been set for either of the Delaware Stockholder Class Actions. Item 4. Mine Safety Disclosures Not Applicable. 39 PART II
Added
AST SpaceMobile, Inc., No. 7:24-cv-00102-DC-RCG (W.D. Tex.) (the “Securities Class Action”).
Added
The complaint in the Securities Class Action, which was filed on April 17, 2024, alleges that defendants violated the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions relating to the status and timeline of satellite production, and that the current executive officers named as defendants are control persons under Section 20(a) of the Exchange Act.
Added
The complaint is filed on behalf of shareholders who purchased shares of the Company’s common stock between November 14, 2023 and April 1, 2024 (“Class Period”), and seeks monetary damages on behalf of the purported class. On July 9, 2024, the Court appointed a Lead Plaintiff for the putative class and approved his choice of Lead Counsel.
Added
On September 9, 2024, the Lead Plaintiff voluntarily dismissed the Securities Class Action without prejudice. 39 The Company has been named as a nominal defendant and certain of its current and former executive officers and directors have been named as defendants in a derivative lawsuit pending in the United States District Court for the Western District of Texas.
Added
The action is styled Hanna v. Avellan, et al., No. 7:24-cv-00171-DC-RCG (W.D. Tex.) (the “Derivative Action”).
Added
The complaint in the Derivative Action, which was filed on July 23, 2024, asserts claims for breach of fiduciary duty, abuse of control, gross mismanagement, waste of corporate assets, and violations of the Exchange Act against all defendants and claims for contribution under the federal securities laws against certain of the defendants.
Added
The parties filed an Agreed Motion for Voluntary Dismissal, which the court granted on October 16, 2024. Item 4. Mine Safety Disclosures Not Applicable. 40 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition, prospects and other factors that our board of directors may deem relevant. Recent Sales of Unregistered Equity Securities None. Issuer Purchases of Equity Securities None.
Any future determination relating to dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including our future earnings, capital requirements, financial condition, prospects, compliance with covenants in our credit agreements and other factors that our board of directors may deem relevant. Recent Sales of Unregistered Equity Securities None.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock and Public Warrants are listed on the Nasdaq Stock Market under the symbols “ASTS” and “ASTSW,” respectively. Our Class B Common Stock and Class C Common Stock are neither listed nor traded.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A Common Stock is listed on the Nasdaq Stock Market under the symbol “ASTS”. Our Class B Common Stock and Class C Common Stock are neither listed nor traded.
Holders As of March 28, 2024 we had approximately 25 holders of record of our Class A Common Stock, four holders of record of Class B Common Stock, one holder of Class C Common Stock and five holders of record of Private Placement and Public warrants, each exercisable for one share of Class A Common Stock at a price of $11.50 per share.
Holders As of February 27, 2025, we had approximately 32 holders of record of our Class A Common Stock, three holders of record of Class B Common Stock, one holder of Class C Common Stock and three holders of record of Private Placement Warrants, exercisable for one share of Class A Common Stock at a price of $11.50 per share.
Removed
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this item will be included in our 2024 Proxy Statement and is incorporated herein by reference. Item 6. Reserved 40
Added
Issuer Purchases of Equity Securities None. 41 Stock Performance Graph The following stock price performance graph should not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report into any filing under the Exchange Act or the Securities Act, except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such acts.
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The graph below illustrates the total return from April 7, 2021, which was the first day our common stock began trading after the closing of Business Combination, through December 31, 2024, for (i) our common stock, (ii) the Russell 2000 Index, and (iii) the NASDAQ Telecommunications Index.
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The graph assumes that $100 was invested on April 7, 2021 in each of our common stock, the Russell 2000 Index, and the NASDAQ Telecommunications Index, and that any dividends were reinvested.
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The comparisons reflected in the graph are not intended to forecast the future performance of our stock and may not be indicative of our future performance. 4/7/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 AST SpaceMobile, Inc. $ 100.00 $ 67.23 $ 40.81 $ 51.06 $ 178.66 Russell 2000 Index 100.00 101.76 80.96 94.67 105.59 NASDAQ Telecommunications Index 100.00 100.79 75.36 84.62 94.05 Item 6.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

96 edited+80 added−59 removed35 unchanged
Future capital requirements will depend on many factors, including: • Establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support our satellite development; • Technological or manufacturing and assembling difficulties, design issues or other unforeseen matters; • Negotiation of launch agreements (including launch costs), launch delays or failures, deployment failures, or in-orbit satellite failures; • Seeking and obtaining necessary regulatory approvals; • Timing of the launch of our satellites and subsequent initiation of service in various markets, delays in which will result in increased operating expenses; • Addressing any competing technological and market developments; • Ability to adjust our expenditures and contractual commitments based on capital availability; • Ability to operate under the covenants in our debt agreements; and • Attracting, hiring, and retaining qualified personnel.
Future capital requirements will depend on many factors, including: • Establishing and maintaining supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support our satellite development; • Technological or manufacturing and assembling difficulties, design issues or other unforeseen matters; • Negotiation of launch agreements (including launch costs), launch delays or failures, deployment failures, or in-orbit satellite failures; • Seeking and obtaining necessary regulatory approvals; • Timing of the launch of our satellites and subsequent initiation of service in various markets, delays in which will result in increased operating expenses; 55 • Addressing any competing technological and market developments; • Ability to adjust our expenditures and contractual commitments based on capital availability; • Ability to operate under the covenants in our debt agreements; and • Attracting, hiring, and retaining qualified personnel.
Our assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification.
Our assessment considers whether the warrants are freestanding financial instruments 56 pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of our control, among other conditions for equity classification.
We evaluate our market, product and coverage plans based upon the attractiveness of certain markets, our technology, regulatory concerns and our access to capital and other resources. We believe we can develop satellite configurations which target delivering service to certain attractive markets without the necessity of building a constellation which covers the entire globe.
We evaluate our market, product and coverage plans based upon the attractiveness of certain markets, our technology, regulatory concerns and our access to capital and other resources. We believe we can develop satellite configurations that target delivering service to certain attractive markets without the necessity of building a constellation which covers the entire globe.
Our significant accounting policies are described in Note 2: Summary of Significant Accounting Policies of the consolidated financial statements included elsewhere in this Report. Our critical accounting policies are described below. Property and Equipment We design and self-construct the BB satellites intended to be used to provide SpaceMobile Service to customers.
Our significant accounting policies are described in Note 2 Summary of Significant Accounting Policies of the consolidated financial statements included elsewhere in this Annual Report. Our critical accounting policies are described below. Property and Equipment We design and self-construct the BB satellites intended to be used to provide SpaceMobile Service to customers.
Impact of Global Macroeconomic and Geopolitical Conflicts We continue to closely monitor the impact of macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policies, higher interest rates, volatility in the capital markets, supply chain challenges, and geopolitical conflicts on all aspects of our business across geographies, including how it has and may continue to impact our operations, workforce, suppliers, and our ability to raise additional capital to fund operating and capital expenditures.
Impact of Global Macroeconomic and Geopolitical Conflicts We continue to closely monitor the impact of macroeconomic conditions, including heightened inflation, changes to fiscal and monetary policies, higher interest rates, volatility in the capital markets, supply chain challenges, imposition of tariffs and geopolitical conflicts on all aspects of our business across geographies, including how it has and may continue to impact our operations, workforce, suppliers, and our ability to raise additional capital to fund operating and capital expenditures.
Factors we consider important in the determination of an impairment include significant underperformance relative to historical or projected future operating results, significant changes in the manner that we use the acquired asset and significant negative industry or economic trends. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2023.
Factors we consider important in the determination of an impairment include significant underperformance relative to historical or projected future operating results, significant changes in the manner that we use the acquired asset and significant negative industry or economic trends. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2024.
The following table sets forth a summary of our consolidated statements of operations for the years ended December 31, 2023 and 2022 (in thousands) and the discussion that follows compares the year ended December 31, 2023, to the year ended December 31, 2022.
The following table sets forth a summary of our consolidated statements of operations for the years ended December 31, 2024 and 2023 (in thousands) and the discussion that follows compares the year ended December 31, 2024 to the year ended December 31, 2023.
On April 1, 2019, we launched our first test satellite, BW1, which was used to validate our satellite to cellular architecture and was capable of managing communications delays from LEO and the effects of doppler in a satellite to ground cellular environment using the 4G-LTE protocol.
On April 1, 2019, we launched our first test satellite, BlueWalker 1 (“BW1”), which was used to validate our satellite to cellular architecture and was capable of managing communications delays from LEO and the effects of doppler in a satellite to ground cellular environment using the 4G-LTE protocol.
Instead, users will be able to access the SpaceMobile Service when prompted on their mobile device that they are no longer within range of the land-based facilities of the MNO operator or will be able to purchase a plan directly with their existing mobile provider.
Instead, users will be able to access the SpaceMobile Service when prompted on their mobile device that they are no longer within range of the land-based facilities of the MNOs or will be able to purchase a plan directly with their existing mobile provider.
The initial borrowings of $48.5 million accrue interest at a fixed rate equal to three-month secured overnight financing rate (“SOFR”) as of the closing date plus 9.625% per annum equal to 14.75% (the “Atlas Fixed Rate”), payable on the last business day of each fiscal quarter.
The initial borrowing of $48.5 million accrued interest at a fixed rate equal to the three-month secured overnight financing rate (“SOFR”) as of the closing date plus 9.625% per annum equal to 14.75% (the “Atlas Fixed Rate”), payable on the last business day of each fiscal quarter.
Overview We are building the first and only global Cellular Broadband network in space to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and other applications for government use utilizing our extensive intellectual property (“IP”) and patent portfolio.
Overview We are building the first and only global Cellular Broadband network in space to be accessible directly by everyday smartphones (2G/4G-LTE/5G devices) for commercial use, and other applications for government use utilizing our extensive IP and patent portfolio.
Prior to initiating such service, we will need to obtain regulatory approvals in each jurisdiction where we would provide such service and would need to enter into definitive agreements with MNOs relating to the offering of such service in each jurisdiction.
Prior to initiating SpaceMobile Service in each jurisdiction, we will need to obtain regulatory approvals in each jurisdiction where we would provide such service and would need to enter into commercial agreements with MNOs relating to the offering of such service in each jurisdiction.
We believe initiation of limited, noncontinuous SpaceMobile Service as well as completing the milestones under the agreement with a prime contractor for the U.S. government will help to demonstrate the advantages of our satellite-based Cellular Broadband service in the market. These market activities will commence while we continue the development and testing of the next generation of BB satellites.
We believe initiation of limited, noncontinuous SpaceMobile Service, as well as completing the milestones under the agreements with prime contractors for the U.S. government, will help to demonstrate the advantages of our satellite-based Cellular Broadband service in the market. These market activities will commence while we continue the development and testing of the next generation of commercial BB satellites.
Our current plan is subject to numerous uncertainties, many of which are beyond our control, including satisfactory and timely completion of assembly and testing of the satellites, availability of launch windows by the launch providers, our ability to raise capital, proposed orbits and resulting satellite coverage, launch costs, ability to enter into agreements with MNOs, regulatory approvals, and other factors.
Our current plan is subject to numerous uncertainties, many of which are beyond our control, including satisfactory and timely completion of assembly and testing of the satellites, regulatory approvals, readiness of launch vehicles, availability of launch windows by the launch providers, logistics, our ability to raise additional capital for manufacturing of satellites and launch payments, proposed orbits and resulting satellite coverage, launch costs, ability to enter into agreements with MNOs and other factors, many of which are beyond our control.
Interest Income (Expense), net Interest income (expense), net consists of interest earned on cash and cash equivalents held in interest bearing demand deposit accounts, net of any interest expense and amortization of debt issuance costs associated with our debt arrangements.
Interest Expense Interest expense consists of cash interest payments and amortization of debt issuance costs associated with our debt arrangements. 47 Interest Income Interest income consists of interest earned on cash and cash equivalents held in interest bearing demand deposit accounts.
Our operations in Israel constitute approximately 5% of the consolidated total assets and approximately 12% of consolidated total operating expenses of the Company. To date, our operations in Israel have not been materially impacted by the geopolitical conflict in the Middle East.
Our operations in Israel constitute approximately 1% of our consolidated total assets and approximately 10% of our consolidated total operating expenses. To date, our operations in Israel have not been materially impacted by the geopolitical conflict in the Middle East.
Engineering services costs consist primarily of the cost of employees and consultants involved in the design and development of the BB satellites, managing the network and satellite operations centers, and indirect costs related to the assembly, integration and testing of the BB satellites, license cost, and general expenses related to AIT facilities and engineering development centers.
Engineering services costs consist primarily of the cost of employees and consultants involved in designing and developing the BB satellites, managing the network and satellite operations centers, and indirectly supporting the assembly, integration and testing of the BB satellites, license cost, and general expenses related to AIT facilities and engineering development centers.
If we are unable to achieve these cost reductions, process improvements, and favorable launch contracts, the average capital cost of the Block 2 BB satellites will be higher and such variations could be material.
If we are unable to achieve the supply chain diversifications, cost reductions, process improvements, and secure favorable future launch contracts, the average capital cost of the Block 2 BB satellites will be higher and such variations could be material.
Certain foreign wholly-owned entities are taxed as corporations in the jurisdictions in which they operate, and accruals for such taxes are included in the consolidated financial statements. Noncontrolling Interest Noncontrolling interest primarily represents the equity interest in AST LLC held by members other than us. As of December 31, 2023, noncontrolling interest in AST LLC was approximately 58.7%.
Certain foreign wholly-owned entities are taxed as corporations in the jurisdictions in which they operate, and accruals for such taxes are included in the consolidated financial statements. Noncontrolling Interest Noncontrolling interest primarily represents the equity interest in AST LLC held by members other than us.
Accordingly, all income, losses, and other tax attributes pass through to the members’ income tax returns, and no U.S. federal and state and local provision for income taxes has been 45 recorded for AST LLC in the consolidated financial statements.
Income Tax Expense AST LLC is treated as a partnership for U.S. federal and state income tax purposes. Accordingly, all income, losses, and other tax attributes pass through to the members’ income tax returns, and no U.S. federal and state and local provision for income taxes has been recorded for AST LLC in the consolidated financial statements.
Investing activities Cash used in investing activities was $118.8 million for the year ended December 31, 2023, as compared to cash used in investing activities of $31.4 million for the year ended December 31, 2022.
Investing activities Cash used in investing activities was $174.1 million for the year ended December 31, 2024, as compared to cash used in investing activities of $118.8 million for the year ended December 31, 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Except as otherwise noted or where the context requires otherwise, references in this report (the “Annual Report”) to “we,” “us” or the “Company” refer to AST SpaceMobile, Inc. and references to our “management” or our “management team” refer to our officers and directors.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Except as otherwise noted or where the context requires otherwise, references in this Annual Report to “we,” “us” or the “Company” refer to AST SpaceMobile, Inc.
Other (Expense) Income, net Total other (expense) income, net was $(10.3) million for the year ended December 31, 2023 as compared to $21.5 million in the year ended December 31, 2022.
Other Income (Expense), net Total other income (expense), net was $1.9 million for the year ended December 31, 2024 as compared to $(10.3) million in the year ended December 31, 2023.
Financing activities Cash provided by financing activities was $116.7 million for the year ended December 31, 2023, as compared to cash provided by financing activities of $102.3 million for the year ended December 31, 2022.
Financing activities Cash provided by financing activities was $780.0 million for the year ended December 31, 2024, as compared to cash provided by financing activities of $116.7 million for the year ended December 31, 2023.
Costs incurred, including direct materials purchased and launch 52 payments made, until the completion of the construction and launch of the BB satellites, are reported as satellite materials, satellites under construction, and advance launch payments within construction-in-progress.
Costs incurred, including direct materials purchased, launch payments made, direct labor costs and overheads such as launch insurance and satellite transportation costs to the launch site, until the completion of the construction and launch of the BB satellites, are reported as satellite materials, satellites under construction, and advance launch payments within construction-in-progress.
The increase was primarily attributable to a $10.5 million increase in payroll and employee related costs, including stock-based compensation expense, due to an increase in headcount and milestones bonuses paid upon achievement of certain milestones, an increase of $10.2 million in AIT facilities and activities and engineering development centers costs including managing mission operations and ground infrastructure and travel expenses, and an increase of $3.9 million in indirect costs associated with testing and production activities.
The increase was primarily attributable to a $10.0 million increase in payroll and employee related costs largely driven by an increase in stock-based compensation expenses due to milestones bonuses paid upon achievement of certain milestones, an increase of $3.8 million in AIT facilities and activities and engineering development centers costs including managing mission operations and ground infrastructure and an increase of $0.9 million in travel expenses.
We believe the larger aperture array is expected to provide greater spectrum reuse, enhanced signal strength and increased capacity, thereby reducing the necessary number of satellites to achieve service coverage as compared to smaller apertures. We continue to make progress towards the completion of the design and development of our Block 2 BB satellites.
We believe the larger aperture array is expected to provide greater spectrum reuse, enhanced signal strength and increased capacity, thereby reducing the necessary number of satellites to achieve service coverage as compared to smaller apertures.
We believe our cash and cash equivalents on hand, which is estimated at $210.8 million as of March 31, 2024, and our ability to raise capital through access to the Equity Line of Credit and the ATM Equity Program, will be sufficient to meet our current working capital needs, planned operating expenses and capital expenditures for a period of the next 12 months from the date of this Annual Report on Form 10-K.
We believe our cash and cash equivalents on hand and our ability to raise capital through access to the 2024 ATM Equity Program will be sufficient to meet our current working capital needs, planned operating expenses and capital expenditures for a period of the next 12 months from the date of this Annual Report.
The Notes may be accelerated upon the occurrence of certain events of default and fundamental change. January 2024 Common Stock Offering On January 23, 2024, we issued 32,258,064 shares of Class A Common Stock in a public offering and received proceeds of $93.6 million, net of underwriting commissions of $6.0 million and transaction costs of $0.4 million.
January 2024 Common Stock Offering On January 23, 2024, we issued 32,258,064 shares of Class A Common Stock in a public offering and received proceeds of $93.6 million, net of underwriting commissions of $6.0 million and transaction costs of $0.4 million.
We believe we need to launch and operate 25 BB satellites (five Block 1 BB satellites and 20 Block 2 BB satellites) in order to provide coverage to the most commercially attractive MNO markets.
We believe we need to launch and operate a total of 25 BB satellites (five Block 1 BB satellites and 20 Block 2 BB satellites) in order to provide coverage to the most commercially attractive MNO markets and potentially generate cash flow from operating activities.
The exact timing of this launch is contingent on a number of factors, including satisfactory and timely completion of the design, assembly and testing of the Block 2 BB satellite, regulatory approvals, availability of launch windows by the launch providers, 42 logistics, and other factors, many of which are beyond our control.
The timing of shipment of the first Block 2 BB satellite is contingent on a number of factors including satisfactory and timely completion of the assembly and testing of the Block 2 BB satellite, regulatory approvals for the launch, readiness of the launch vehicle, logistics and other factors, many of which are beyond our control.
We provided a 30-day option to the underwriting agent to purchase up to an additional 4,838,709 shares of Class A Common Stock (the “Option Shares”) from us on the same terms and conditions. On January 25, 2024, the Option Shares were exercised in full.
We provided a 30-day option to the underwriting agent to purchase up to an additional 4,838,709 shares of Class A Common Stock (the “Option Shares”) from us on the same terms and conditions, which was exercised in full resulting in proceeds of $14.1 million, net of underwriting commissions of $0.9 million.
Factors Affecting Comparability of Our Future Results of Operations to Our Historical Results of Operations Our historical financial performance has been, and we expect our financial performance in the future to be driven by our ability to execute on our strategy.
We currently do not expect potential interruptions to our operations in Israel to have a material impact on the Company. 46 Factors Affecting Comparability of Our Future Results of Operations to Our Historical Results of Operations Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to execute on our strategy.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto included in Item 8 - Financial Statements and Supplementary Data of this Annual Report on Form 10-K for the year ended December 31, 2023, including our consolidated financial statements and related notes contained therein.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto included in Item 8 - Financial Statements and Supplementary Data of this Annual Report.
The Notes bear interest at a rate of 5.50% per year, payable semi-annually in arrears beginning on June 30, 2024, in cash or in kind at our option. We intend to elect to pay the contractual interest amount in kind. The Notes have a ten-year term unless earlier converted.
The Convertible Notes bear interest at a rate of 5.50% per year, payable semi-annually in arrears on June 30 and December 30 of each year, beginning on June 30, 2024. We have the option to pay interest on the Convertible Notes in cash or in kind.
Unless otherwise indicated, all references to “dollars” and “$” in this Annual Report are to, and all monetary amounts in this Annual Report are presented in, U.S. dollars.
Unless otherwise indicated, all references to “dollars” and “$” in this Annual Report are to, and all monetary amounts in this Annual Report are presented in, U.S. dollars. This section of this Annual Report generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
R&D costs consist principally of development activities in which we typically engage third-party vendors and are largely driven by the achievement of milestones that trigger payments and costs of materials in supplies consumed in the development activities. R&D costs are expected to fluctuate quarter over quarter depending on achievement of milestones.
R&D costs consist principally of development activities in which we typically engage third-party vendors for the design and development of electronic componentry, software, and mechanical deployment systems, and are largely driven by the achievement of milestones that trigger payments and costs of materials and supplies consumed in the development activities.
(collectively, the “agents”) to sell shares of our Class A Common Stock having an aggregate sales price of up to $150.0 million through an “at the market offering” program under which the agents will act as sales agents.
(collectively, the “agents”) to sell shares of our Class A Common Stock having an aggregate sales price of up to $150.0 million through an “at the market offering” program under which the agents acted as sales agents. The agents were entitled to total compensation at a commission rate of up to 3.0% of the gross sales price per share sold.
We may adopt a strategy for commercial launch of the SpaceMobile Service, including the nature and type of services offered and the geographic areas where we may launch such services, that may differ materially from our current plan.
We may adopt a strategy for commercial launch of the SpaceMobile Service, including the nature and type of services offered and the geographic markets where we may launch such services, that may differ materially from our current plan. We are an early stage company and, as such, we are subject to all of the risks associated with early stage companies.
We are expanding our efforts on ground infrastructure development for commercial readiness and integrating our SpaceMobile service into the MNOs’ infrastructure to enable us to initiate commercial services.
We plan to enter into a commercial agreement with Verizon in the United States. We are also expanding our efforts on ground infrastructure development for commercial readiness and integrating our SpaceMobile Service into the MNOs’ infrastructure to initiate commercial services.
Depreciation and Amortization Total depreciation and amortization expense increased by $49.8 million, or 1,056%, to $54.5 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Depreciation and Amortization Total depreciation and amortization expense increased by $8.9 million, or 16%, to $63.3 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Gain (Loss) on Remeasurement of Warrant Liabilities Public Warrants and Private Placement Warrants issued by us are accounted for as liability-classified instruments at their initial fair value on the date of issuance.
(Loss) Gain on Remeasurement of Warrant Liabilities Private Placement Warrants issued by us are accounted for as liability-classified instruments at their initial fair value on the date of issuance. They are remeasured on each balance sheet date and changes in the estimated fair value are recognized as an unrealized gain or loss in the consolidated statements of operations.
Following the launch and deployment of five Block 1 BB satellites, we currently plan to initiate a limited, noncontinuous SpaceMobile Service in targeted geographical areas, including in the United States, and seek to generate revenue from such service.
We currently plan to utilize the Block 1 BB satellites to initiate a limited, noncontinuous SpaceMobile Service in targeted geographical markets, including in the United States, and validate and test non-commercial government applications and seek to generate revenue from such services.
General and Administrative Costs Total general and administrative costs decreased by $6.7 million, or 14%, to $41.6 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
General and Administrative Costs Total general and administrative costs increased by $20.0 million, or 48%, to $61.6 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The estimated capital cost per Block 2 BB satellite is based on a number of factors, including securing launch contracts with more favorable terms, bulk ordering of parts and components, cost reductions due to the benefits of economies of scale and process improvements, and other factors.
The estimated average capital cost per Block 2 BB satellite is based on securing future launch contracts with more favorable terms, diversifying our supply chain to include cost-effective and low-cost suppliers, cost reductions due to the benefits of economies of scale, continuous process improvements, and other factors.
The Block 1 BB satellites will be of similar size and weight to the BW3 test satellite, includes our own designed array solar panels and battery systems, and will have ten times higher throughput than the BW3 test satellite.
The Block 1 BB satellites are of similar size and weight to the BW3 test satellite and have ten times higher throughput than the BW3 test satellite.
The $7.5 million decrease in cash used in operating activities was attributable to a decrease of $38.1 million in working capital offset by an increase of $30.6 million in expenses to support expanded operations during the year ended December 31, 2023.
The $22.8 million decrease in cash used in operating activities was attributable to a decrease of $14.7 million in expenses to support operations and a decrease of $8.1 million in working capital during the year ended December 31, 2024.
Refer to Note 8: Debt in the accompanying notes to the consolidated financial statements for further information.
Refer to Note 2: Summary of Significant Accounting Policies in the accompanying notes to the consolidated financial statements for further information.
The agents are entitled to total compensation at a commission rate of up to 3.0% of the gross sales price per share sold. We plan to raise capital, as and when needed, under the Sales Agreement at our sole discretion.
The agents are entitled to total compensation at a commission rate of up to 3.0% of the gross sales price per share sold.
We plan to raise additional capital through the issuance of equity, equity-linked or debt securities (secured or unsecured), secured or unsecured loans or other debt facilities, and credit from government or financial institutions or commercial partners, including through our existing Equity Line of Credit and the ATM Equity Program.
We plan to raise additional capital through the issuance of equity, equity-linked or debt securities (secured or unsecured), secured or unsecured loans or other debt facilities, and credit from government or financial institutions or commercial partners. Our ability to access the capital markets during this period of volatility may require us to modify our current expectations.
Our next generation of commercial BB satellites (“Block 2 BB satellites”) are expected to derive greater performance through the introduction of our own AST5000 Application Specific Integrated Circuit (“ASIC”) chip, which we believe will enable materially greater throughput capacity of up to 40 MHz per beam to support 120 Mbps peak data rates and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a lower overall unit cost.
In addition, when we introduce our own AST5000 ASIC chip in the Block 2 BB satellites, we expect to achieve materially greater throughput capacity of up to 40 MHz per beam to support 120 Mbps peak data rates and up to 10,000 MHz of processing bandwidth per Block 2 BB satellite, require less power and offer a lower overall unit cost.
However, if macroeconomic conditions deteriorate or there are unforeseen developments, our results of operations and financial condition may be adversely affected. We operate from multiple locations that include our corporate headquarters and 185,000 square feet AIT facilities in Texas where the final AIT is performed, and engineering and development centers elsewhere in the United States, India, Scotland, Spain and Israel.
We operate from multiple locations that include our corporate headquarters and 194,000 square feet AIT facilities in Texas where the final AIT is performed, engineering and development centers in the United States, India and Scotland, and engineering, development and production centers in Spain and Israel.
Gain on Remeasurement of Warrant Liabilities Decrease in fair value of warrant liabilities resulted in a gain of $9.0 million for the year ended December 31, 2023 as compared to the gain of $19.1 million during the year ended December 31, 2022.
(Loss) Gain on Remeasurement of Warrant Liabilities The increase in fair value of warrant liabilities at the time of warrant exercises and the fair value adjustment for Private Placement Warrants outstanding at December 31, 2024 resulted in a loss of $268.6 million for the year ended December 31, 2024 as compared to the gain of $9.0 million during the year ended December 31, 2023.
We drew the entire $15.0 million facility on September 19, 2023 and incurred $0.1 million of transaction costs. The net proceeds were and are expected to continue to be used for general corporate purposes.
We drew the entire $15.0 million facility on September 19, 2023 and incurred $0.1 million of transaction costs.
We intend to continue testing capabilities of the BW3 test satellite, including further testing with cellular service providers and devices. 41 We are currently in the advanced stages of assembling and testing our first generation of commercial BB satellites (“Block 1 BB satellites”).
We intend to continue testing capabilities of the BW3 test satellite, including further testing with cellular service providers and the U.S. government. 43 We launched five first generation commercial BB satellites (“Block 1 BB satellites”) on September 12, 2024.
Proceeds from the sale of our Class A Common Stock under the Common Stock Purchase Agreement were and will continue to be used for general corporate purposes. Equity Distribution Agreement On September 8, 2022, we entered into an Equity Distribution Agreement (the “Sales Agreement” or “ATM Equity Program”) with Evercore Group L.L.C. and B. Riley Securities, Inc.
Proceeds from the sale of our Class A common stock under the January 2024 Common Stock Offering were used for general corporate purposes. 2024 Equity Distribution Agreement On September 5, 2024, we entered into an Equity Distribution Agreement (the “2024 Sales Agreement” or “2024 ATM Equity Program”) with B.
Until such time, if ever, as we can generate substantial revenues to support our cost structure, we expect to finance cash needs through a combination of equity offerings, debt financings, commercial and other similar arrangements.
Until such time, if ever, as we can generate substantial revenues to support our cost structure, we expect to finance cash needs through the issuance of equity, equity-linked or debt securities (secured or unsecured), secured or unsecured loans or other debt facilities, and credit from government or financial institutions or commercial partners.
Following the launch and deployment of five Block 1 BB satellites, we currently plan to initiate a limited, noncontinuous SpaceMobile Service in targeted geographical areas, including in the United States, subject to obtaining regulatory approval and negotiating and executing definitive agreements with MNOs, and seek to 44 generate revenue from such service.
We currently plan to initiate a limited, noncontinuous SpaceMobile Service in targeted geographical markets in 2025, including in the United States, subject to obtaining additional regulatory approvals and executing definitive agreements with additional MNOs, and seek to generate revenue from such service. Engineering Services Costs Engineering services costs are charged to expense as incurred.
We launched our BlueWalker 3 (“BW3”) test satellite on September 10, 2022, and announced the completion of the deployment of the communication phased array antenna of the BW3 test satellite in orbit on November 14, 2022. On April 25, 2023, we announced that we had successfully completed two-way voice calls directly to standard unmodified smartphones using the BW3 test satellite.
We launched our BW3 test satellite on September 10, 2022, and announced the completion of the deployment of the communication phased array antenna of the BW3 test satellite in orbit on November 14, 2022.
Proceeds from the sale of our Class A Common Stock under the Sales Agreement were and will continue to be used for general corporate purposes.
The 2022 ATM Equity Program was fully utilized as of July 15, 2024. Proceeds from the sale of our Class A Common Stock under the Sales Agreement were used for general corporate purposes.
The consolidated effective tax rate for years ended December 31, 2023 and 2022 was (1%). Refer to Note 14: Income Taxes in the accompanying notes to the consolidated financial statements for further information.
Refer to Note 13 Income Taxes in the accompanying notes to the consolidated financial statements for further information. Net Loss Attributable to Noncontrolling Interest Net loss attributable to noncontrolling interest was $226.2 million and $135.1 million for the year ended December 31, 2024 and the year ended December 31, 2023, respectively.
The $87.5 million increase in cash used in investing activities was primarily attributable to a $61.5 million increase in purchases of property and equipment, including procurement of BB satellite materials and advance launch payments, and $26.0 million proceeds from sale of Nano, net of cash deconsolidated and transaction costs, in September 2022.
The $55.3 million increase in cash used in investing activities was entirely attributable to an increase in purchases of property and equipment, including procurement of BB satellite materials and advance launch payments.
Cash Flows Historical Cash Flows The following table summarizes our sources and uses of cash for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Cash, cash equivalents and restricted cash $ 88,097 $ 239,256 Cash used in operating activities $ (148,942 ) $ (156,464 ) Cash used in investing activities (118,807 ) (31,352 ) Cash provided by financing activities 116,732 102,340 Operating activities Cash used in operating activities was $148.9 million for the year ended December 31, 2023, as compared to cash used in operating activities of $156.5 million for the year ended December 31, 2022.
The AT&T Commercial Agreement expires on December 31, 2030, subject to auto-renewal for successive two-year periods unless either party terminates in accordance with the terms of the AT&T Commercial Agreement. 54 Cash Flows Historical Cash Flows The following table summarizes our sources and uses of cash for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Cash, cash equivalents and restricted cash $ 567,534 $ 88,097 Cash used in operating activities $ (126,143 ) $ (148,942 ) Cash used in investing activities (174,127 ) (118,807 ) Cash provided by financing activities 779,967 116,732 Operating activities Cash used in operating activities was $126.1 million for the year ended December 31, 2024, as compared to cash used in operating activities of $148.9 million for the year ended December 31, 2023.
However, there can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future, including by heightened levels of inflation experienced globally as a consequence of the rapidly changing market and economic conditions. 51 Funding Requirements We believe our existing cash and cash equivalents as of December 31, 2023, funds raised in January 2024 and access to the Equity Line of Credit and ATM Equity Program will be sufficient to meet anticipated cash requirements for the next 12 months from the date hereof.
Funding Requirements We believe our existing cash and cash equivalents as of December 31, 2024, funds raised in January 2025 and access to the 2024 ATM Equity Program will be sufficient to meet anticipated cash requirements for the next 12 months from the date hereof.
Recent Developments Convertible Security Investment Agreement On January 16, 2024, we entered into a Convertible Security Investment Agreement (the “Investment Agreement”) with AT&T, Google and Vodafone (the “Investors”) to issue subordinated convertible notes for an aggregate principal amount of $110.0 million (such notes, the “Notes” and such investments, the “Investments”) to the Investors.
The net proceeds were used for general corporate purposes. 53 Convertible Security Investment Agreement Pursuant to the Convertible Security Investment Agreement which we entered into with certain investors, we issued subordinated convertible notes (“2034 Convertible Notes”) for an aggregate principal amount of $110.0 million on January 16, 2024 to AT&T, Google, and Vodafone, and for an aggregate principal amount of $35.0 million on May 23, 2024 to Verizon.
If AST Texas fails to perform its obligations under these and other covenants, or should any event of default occur, the term loan may be terminated and any outstanding borrowings, together with unpaid accrued interest, could be declared immediately due and payable, and the lender will be authorized to take possession of the collateral. 49 Senior secured credit facility On August 14, 2023, we entered into a senior secured term loan credit agreement with ACP Post Oak Credit II LLC as administrative agent and collateral agent and Atlas Credit Partners, LLC (“Atlas”) as lender, providing for a principal loan commitment of up to $100.0 million (the “Atlas Credit Agreement”), of which $48.5 million was borrowed upon closing.
If AST Texas fails to perform its obligations under these and other covenants, or should any event of default occur, the term loan may be terminated and any outstanding borrowings, together with unpaid accrued interest, could be declared immediately due and payable, and the lender will be authorized to take possession of the collateral.
The SpaceMobile Service currently is planned to be provided by a constellation of high-powered, large phased-array satellites in Low Earth Orbit (“LEO”) using low band and middle band spectrum controlled by Mobile Network Operators (“MNOs”). We are headquartered in Texas where we operate 185,000 square feet satellite assembly, integrating and testing (“AIT”) facilities.
The SpaceMobile Service is being designed to provide cost-effective, high-speed Cellular Broadband services to end-users who are out of terrestrial cellular coverage using existing mobile devices. The SpaceMobile Service currently is planned to be provided by a constellation of high-powered, large phased-array satellites in low Earth orbit (“LEO”) using low-band and mid-band spectrum controlled by Mobile Network Operators (“MNOs”).
The Block 2 BB satellites are expected to be approximately 2,400 square feet in size, almost 3.5 times bigger than the Block 1 BB satellites, and will have the largest phased array ever deployed in a LEO for commercial use exceeding the phased array of the BW3 test satellite and planned Block 1 BB satellites.
Our next generation of commercial BB satellites, “Block 2 BB satellites,” featuring up to approximately 2,400 square feet communication array, the largest communication array to be ever deployed in a LEO for commercial use and more than three times bigger than the communication array of the Block 1 BB satellites in orbit today, are designed to deliver up to 10 times the bandwidth capacity of the Block 1 BB satellites.
The increase in R&D costs was primarily driven by increases for the design and development of the BB Block 1 satellites and the development of ground infrastructure programs for commercial readiness, which were offset by completing the IP design of our ASIC chip and reduced expenditure on the design and development of certain subsystems for the BB Block 2 satellites during the current period.
The decrease in R&D costs was driven by substantially completing the design and development of the initial configuration of the Block 2 BB satellites, completion of certain milestones related to the development of ground infrastructure programs for commercial readiness, and overall completion and launch of the Block 1 BB satellites.
Upon closing, we received net proceeds of $37.2 million, net of debt issuance costs of $9.5 million and deposit of $1.8 million into an interest reserve escrow account. Debt issuance costs of $9.5 million consist of agent fees, offering expenses, and two years of cash premium coverage.
We received proceeds of $37.2 million, net of debt issuance costs of $9.5 million and deposit of $1.8 million into an interest reserve escrow account. The net proceeds were used for general corporate purposes as permitted under the Atlas Credit Agreement.
We anticipate launching and deploying additional satellites beyond the initial 95 satellites in order to enhance coverage and system capacity in response to incremental market demand.
We anticipate launching and deploying additional satellites beyond the initial 90 satellites in order to enhance coverage and system capacity in response to incremental market demand. Continuous coverage is not expected to be available at all times in certain areas due to numerous factors, including number of active satellites in the region, latitude coverage range, and other factors.
We currently believe that the estimated average capital costs, consisting primarily of direct materials and launch costs, required for the assembly, integration, testing and launch of a constellation of 95 Block 2 BB satellites to be approximately $16.0 million to $18.0 million per satellite.
We continue to estimate the average capital costs, consisting of direct materials and launch costs, for a constellation of 90 Block 2 BB satellites to be approximately $19.0 million to $21.0 million per satellite, with initial launches higher than that range and trending down over time as we optimize payloads and launch terms.
The $14.4 million increase in cash provided by financing activities was primarily attributable to $53.4 million of net proceeds from borrowings on the Atlas Credit Agreement and Lone Star Loan Agreement, partially offset by $39.0 million decrease in net proceeds from the sale of Class A Common Stock under the secondary public offerings, ATM Equity Program and Equity Line of Credit.
The $663.3 million increase in cash provided by financing activities was attributable to a $476.0 million increase in net proceeds from the sale of Class A Common Stock from public offerings and under the ATM Equity Programs, a $153.6 million increase in proceeds from exercise of Public Warrants, an additional $81.8 million in net proceeds from the issuance of debt, and a $0.4 million net increase in proceeds from issuance of stock-based compensation awards, partially offset by an increase in debt repayments of $48.5 million.
We plan to achieve substantial service in the selected, targeted geographical areas with the launch and operation of 25 BB satellites and achieve substantial service in all targeted geographical areas to meet our long term business goals with the launch and operation of approximately 95 BB satellites.
We plan to achieve noncontinuous SpaceMobile Service in the selected, targeted geographical markets with the launch and operation of a total of 25 BB satellites (five Block 1 BB satellites and 20 Block 2 BB satellites).
We are an early stage and emerging growth company and, as such, we are subject to all of the risks associated with early stage and emerging growth companies. Please refer to Risk Factors contained in Part I, “Item 1A. Risk Factors” included in our Annual Report.
Please refer to Risk Factors contained in Part I, “Item 1A. Risk Factors” included in the Annual Report.
The offering of the Option Shares closed on January 29, 2024 for proceeds of $14.1 million, net of underwriting commissions of $0.9 million. Proceeds from the sale of our Class A common stock under the January 2024 Common Stock Offering were and are expected to be used for general corporate purposes.
June 2023 Common Stock Offering On June 30, 2023, we issued 12,500,000 shares of Class A Common Stock in a public offering and received proceeds of $56.6 million, net of transaction costs of $0.3 million. Proceeds from the sale of our Class A Common Stock under the June 2023 Common Stock Offering were used for general corporate purposes.
Components of Results of Operations Revenues To date, we have not generated any revenues from our SpaceMobile Service. All revenues during the year ended December 31, 2022 were generated from sales and services by our former subsidiary, Nano. Following the completion of the sale of Nano on September 6, 2022, we did not generate any revenue.
Components of Results of Operations Revenues To date, we have not generated any revenues from our SpaceMobile Service and do not expect to generate revenue until we launch the SpaceMobile Service.
In 2024, we expect to begin generating revenue from the resale of gateway equipment and associated services to MNOs and other third parties, and from completing defined milestones under an agreement with a prime contractor for the U.S. government.
Beginning in the first quarter of 2024, we have recognized revenue from completion of performance obligations under agreements with prime contractors for the U.S. government and expect to continue to recognize revenue as and when we complete the remaining performance obligations under the agreements. In 2024, we generated revenue from the resale of gateway equipment and associated services to MNOs.
Our IP portfolio is diverse, containing numerous and various innovations of the direct-to-cell satellite ecosystem from space to Earth. Our IP portfolio consists of 36 patent families worldwide. As of December 31, 2023, we had more than 3,350 patent and patent pending claims worldwide, of which approximately 1,050 have been officially granted or allowed.
As of December 31, 2024, our IP portfolio consists of more than 3,500 patent and patent pending claims worldwide, of which approximately 1,550 have been officially granted or allowed. This includes 36 patent families worldwide. Our patents have various terms expiring starting 2039. We are headquartered in Texas where we operate 194,000 square feet satellite AIT facilities.
Interest Income (Expense), net Total interest income (expense), net increased by less than $0.1 million, or 2%, to $2.7 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Interest Income Total interest income increased by $7.0 million, or 97%, to $14.2 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023. The increase was driven by a higher cash and cash equivalents balance held in interest bearing short-term money market funds.

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