# AST SpaceMobile, Inc.: Form 10-Q for the period ended Sep 30, 2023

- Company: [AST SpaceMobile, Inc.](/companies/asts.md) (CIK 1780312)
- Form: 10-Q
- Filed: 2023-11-14
- Accepted by EDGAR: Nov 14, 2023, 16:18 ET
- Period: 2023-09-30
- Accession: 0000950170-23-063737
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1780312/000095017023063737/asts-20230930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1780312/000095017023063737/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-07-01 to 2023-09-30 | $0 | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Revenue | 9 months, 2023-01-01 to 2023-09-30 | $0 | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2023-07-01 to 2023-09-30 | $0 | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2023-01-01 to 2023-09-30 | $0 | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2023-07-01 to 2023-09-30 | $0 | us-gaap:GrossProfit |
| Gross profit | 9 months, 2023-01-01 to 2023-09-30 | $0 | us-gaap:GrossProfit |
| Research and development | 3 months, 2023-07-01 to 2023-09-30 | $9.4m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2023-01-01 to 2023-09-30 | $36.7m | us-gaap:ResearchAndDevelopmentExpense |
| Income tax | 3 months, 2023-07-01 to 2023-09-30 | −$266.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-01-01 to 2023-09-30 | $408.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-07-01 to 2023-09-30 | −$20.9m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-01-01 to 2023-09-30 | −$55.6m | us-gaap:NetIncomeLoss |
| Operating cash flow | 9 months, 2023-01-01 to 2023-09-30 | −$124.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2023-01-01 to 2023-09-30 | $96.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2023-09-30 | $133.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-09-30 | $163.1m | us-gaap:AssetsCurrent |
| Total assets | at 2023-09-30 | $402.1m | us-gaap:Assets |
| Current liabilities | at 2023-09-30 | $26.9m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-09-30 | $114.9m | us-gaap:Liabilities |
| Long-term debt | at 2023-09-30 | $58.5m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-09-30 | $249.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2023-09-30 | $287.2m | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest |

## Management's discussion and analysis

As filed, 58,613 characters.

Except as otherwise noted or where the context requires otherwise, references in this report (the “Quarterly 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.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Item 1 of this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2022, including our audited consolidated financial statements and related notes contained therein. 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.

### Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” for the purposes of federal securities laws that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to Part I, “Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022. The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

### Overview

We are building the first and only global Cellular Broadband network in space to operate directly with off-the-shelf and unmodified 2G/4G LTE/5G devices utilizing our extensive IP and patent portfolio. 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 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 foot satellite assembly, integrating and testing (“AIT”) facilities. Our intellectual property (“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 35 patent families worldwide. As of September 30, 2023, we had more than 3,100 patent and patent pending claims worldwide, of which approximately 1,000 have been officially granted or allowed.

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. 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. We generally seek to use a revenue-sharing business model for SpaceMobile Service in our agreements with MNOs.

The SpaceMobile Service is expected to be highly attractive to MNOs as it will enable them to improve and differentiate their service offering without significant incremental capital investments. The SpaceMobile Service is expected to enable MNOs to augment and extend their coverage without building towers or other land-based infrastructure, including where it is not cost-justified or is difficult due to geographical challenges. 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 unit (“ARPU”).

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.

We launched our BlueWalker 3 (“BW3”) test satellite on September 10, 2022. On November 14, 2022, we announced the completion of the deployment of the communication phased array antenna of the BW3 test satellite in orbit. 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. In addition to test calls, we performed the initial compatibility tests on a variety of smartphones and devices, exchanging SIM and network information directly to the BW3 test satellite, a necessary capability to provide broadband connectivity from space. These initial test calls validated our patented systems and architecture to establish cellular connections with unmodified cellular devices. Accordingly, we determined that the BW3 test satellite was ready for its intended use as of April 25, 2023 and began depreciating it over its estimated remaining useful life of approximately 16 months. On June 21, 2023, we announced that we had achieved repeated successful 4G download speeds of above 10 megabits per second (“Mbps”) during testing of BW3. On September 19, 2023 we announced that we had achieved repeated successful two-way voice calls directly to standard unmodified smartphones using 5G connectivity and successful download speeds of approximately 14 Mbps utilizing 5 megahertz (“Mhz”) of low band spectrum via the BW3 test satellite. We intend to continue testing capabilities of the BW3 test satellite, including further testing with cellular service providers and devices.

We are also currently designing and assembling our constellation of BlueBird (“BB”) satellites. We are leveraging skills, know-how and technological expertise derived from the design and assembly of our BW3 test satellite in the development and assembly of our BB satellite platform. We are currently assembling the first generation of commercial BB satellites (“Block 1 BB satellites”). We expect the Block 1 BB satellites will be of similar size and weight to the BW3 test satellite and have design improvements for enhanced power efficiency and throughput designed to increase capacity and coverage capability. We currently expect to launch five Block 1 BB satellites during the first quarter of 2024 and have entered into and substantially completed payment for a launch services agreement for the launch of the first five Block 1 BB satellites. The exact timing of the launch, which is expected to carry five Block 1 BB satellites, is contingent on a number of factors, including timely supply of materials and components by the vendors, satisfactory and timely completion of assembly and testing of five Block 1 BB satellites and other factors, many of which are beyond our control. The SpaceMobile Service has not been launched and therefore has not yet generated any revenue. 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. 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 and governmental entities relating to the offering of such service in each jurisdiction. We expect to enter into commercial agreements with MNOs and governmental entities for the use of our five Block 1 BB satellites, although there can be no assurance that we will be successful in entering into these agreement on terms acceptable to us or at all. If we are successful in entering into these agreements, we expect to generate revenue in 2024. We also are seeking to generate revenue from the resale of gateway equipment and stations and related services to MNOs and third parties beginning in 2024.

We believe the deployment of Block 1 BB satellites and subsequent initiation of limited noncontinuous SpaceMobile Service will help to demonstrate the advantages of a satellite-based Cellular Broadband service in the marketplace. This market activity may commence while we continue the development and testing of the next generation of our BB satellites.

Our next generation of 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 provide materially greater throughput capacity, require less power and offer a lower overall unit cost. We expect that the Block 2 BB satellites will also benefit from the advantages of a larger aperture array which provides greater spectrum reuse, enhanced signal strength and increased capacity, thereby reducing the necessary number of satellites to achieve service as compared to smaller apertures. We plan to begin the assembly, integration and testing of the Block 2 BB satellites in 2024, subject to our ability to successfully raise additional capital for development of the Block 2 BB satellites. We would also need to enter into launch agreements for the launch of the Block 2 BB satellites. The exact timing of launch of any Block 2 BB satellites is contingent on a number of factors, including satisfactory and timely completion of the design, assembly and testing of the Block 2 BB satellites, our ability to execute agreements for the launch of the Block 2 satellites, availability of launch vehicles and launch windows by the launch providers, our ability to raise additional capital, and other factors, many of which are beyond our control.

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. This prioritization of coverage is designed to minimize the capital required to initiate and operate commercial service that generates cash flows from operating activities sooner. We expect that such a successful commercial service would enable us to attract additional capital to continue to assemble and launch additional BB satellites to expand our capacity and geographic coverage area, although there can be no assurance that such capital would be available on terms acceptable to us, or at all.

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 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. 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. 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 have completed the research and development (“R&D”) programs associated with the design and development of Block 1 BB satellites. We have also substantially completed the procurement of required subsystems and components, the industrialization of our assembly, integration, and testing facilities and processes and are continuing to make progress on the production of the five Block 1 BB satellites. We are continuing to expand our efforts for the development of ground infrastructure and gateways to which we will integrate our SpaceMobile service into the MNOs’ infrastructure and enable us to initiate commercial services after the launch and deployment of the first five Block 1 BB satellites. We are continuing to make progress on the design and development of certain subsystems of the Block 2 BB satellites and the substantial completion of the design and readiness for tape-out of our ASIC chip.

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 on Form 10-K for the year ended December 31, 2022.

#### Impact of COVID-19, Global Macroeconomic and Geopolitical Conflicts

We continue to closely monitor the impact of COVID-19 and macroeconomic conditions, including heightened inflation, slower growth or recession, 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.

Changes in the prices of satellite materials due to inflation, supply chain challenges, and other macroeconomic factors may affect our capital costs estimates to build and launch the satellite constellation and adversely affect our financial condition. The extent of impact of these factors on our business will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time. To date, these factors have not had a material impact to our technology development efforts or results of our operations. 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 foot 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. Our operations in Israel constitute less than 5% of the consolidated total assets of the Company. To date, our operations in Israel have not been materially impacted by the geopolitical conflict in the Middle East. We currently do not expect potential interruptions to our operations in Israel to have a material impact on the Company.

### 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. Our future results of operations could differ materially from the historical results of operations as we expect to complete the assembly and launch the five Block 1 BB satellites in the first quarter of 2024, complete the ASIC design, set up ground cellular and infrastructure in preparation for commercial services, and continue the research and development for design and development of Block 2 BB satellites.

### Components of Results of Operations

#### Revenues

To date, we have not generated any revenues from our SpaceMobile Service. All revenues during the three and nine months ended September 30, 2022 were generated from the development and manufacture of satellite technology, and ancillary sales and services globally by our former subsidiary, Nano. Nano also sold individual satellite parts, subsystems, and software to be configured to customers’ satellites, and entered into “rideshare” type agreements whereby Nano provided hosted payload services using customers’ payloads integrated with Nano-owned satellite buses for scheduled launches. Following the completion of the sale of Nano on September 6, 2022, we no longer generate any revenue. 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 governmental entities, and seek to generate revenue from such service. We also will seek to generate revenue from the resale of gateway equipment and stations and associated services to MNOs and third parties.

#### Cost of Sales

Cost of sales during the three and nine months ended September 30, 2022 consisted of the costs of various materials used and services performed, including employee costs and overhead costs to fulfill Nano’s sales contracts. Following the completion of the sale of Nano on September 6, 2022, we do not expect to generate revenue and incur associated cost of sales in future periods until we launch the SpaceMobile Service and/or begin to generate revenue from the resale of gateway equipment and stations and associated services to MNOs and third parties.

#### Engineering Services Costs

Engineering services costs are charged to expense as incurred. Engineering costs consist primarily of the cost of employees and consultants involved in the design, development, assembly, integration and testing of our satellites, managing our network, ground infrastructure, and satellite operations centers, travel expenses of engineering staff, and general expenses related to AIT facilities and engineering development centers.

#### General and Administrative Costs

General and administrative costs include the costs of insurance, cost of non-engineering personnel and personnel related expenses, software licensing and subscriptions, office and facilities expenses, investor relations, and professional services, including public relations, accounting and legal fees.

#### Research and Development Costs

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. R&D costs are expected to fluctuate quarter over quarter depending on achievement of milestones.

#### Depreciation and Amortization

Depreciation and amortization expense includes depreciation expense related to property and equipment including BW3 test satellite, as well as definite lived intangible assets. We began depreciating the BW3 test satellite as of April 25, 2023 over its expected remaining useful life of approximately 16 months.

#### 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. 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 unaudited condensed consolidated statements of operations.

#### Other Income (Expense), Net

Other income (expense), net primarily consists of interest earned on cash and cash equivalents held by us in interest bearing demand deposit accounts, net of any interest expense associated with our debt arrangements, and other non-operating expense and income, including foreign exchange gains or losses.

#### Income Tax Benefit (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 unaudited condensed consolidated financial statements. 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 unaudited condensed consolidated financial statements.

#### Noncontrolling Interest

Noncontrolling interest primarily represents the equity interest in AST LLC held by members other than the Company. As of September 30, 2023, noncontrolling interest in AST LLC was approximately 58.9%. For the three and nine months ended September 30, 2022, and up to September 6, 2022, noncontrolling interest also included approximately 49% equity interests in our former subsidiary, Nano, held by equityholders other than the Company. On September 6, 2022, the noncontrolling interest in Nano was eliminated in connection with the sale of the Company’s 51% interest in Nano. We attributed a portion of net income or loss generated at AST LLC and Nano to the noncontrolling interest based on their ownership interests.

### Results of Operations

### Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

We report our results of operations under one operating segment. The following table sets forth a summary of our unaudited condensed consolidated statements of operations for the three months ended September 30, 2023 and 2022 (in thousands) and the discussion that follows compares the three months ended September 30, 2023 to the three months ended September 30, 2022.

*(unaudited)*

|  | For the Three Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| **Revenues** | $- | $4,168 | $(4,168) | (100)% |
| **Cost of sales (exclusive of items shown separately below)** | - | 2,525 | (2,525) | (100) |
| **Gross profit** | - | 1,643 | (1,643) | (100) |
| **Operating expenses:** |  |  |  |  |
| Engineering services costs | 19,523 | 14,492 | 5,031 | 35 |
| General and administrative costs | 10,995 | 12,916 | (1,921) | (15) |
| Research and development costs | 9,418 | 13,543 | (4,125) | (30) |
| Depreciation and amortization | 19,029 | 1,172 | 17,857 | 1,524 |
| **Total operating expenses** | 58,965 | 42,123 | 16,842 | 40 |
| **Other income (expense):** |  |  |  |  |
| Gain (loss) on remeasurement of warrant liabilities | 7,481 | (15,897) | 23,378 | (147) |
| Other income, net | 1,002 | 24,875 | (23,873) | (96) |
| **Total other income (expense), net** | 8,483 | 8,978 | (495) | (6) |
| **Loss before income tax expense** | (50,482) | (31,502) | (18,980) | (60) |
| Income tax expense | (266) | (550) | 284 | 52 |
| **Net loss before allocation to noncontrolling interest** | (50,748) | (32,052) | (18,696) | (58) |
| Net loss attributable to noncontrolling interest | (29,839) | (22,286) | (7,553) | (34) |
| **Net loss attributable to common stockholders** | $(20,909) | $(9,766) | $(11,143) | (114)% |

#### Revenues

All revenues during the three months ended September 30, 2022, were generated from the development and manufacture of satellite technology, and ancillary sales and services globally by our former subsidiary, Nano. Following the completion of the sale of Nano on September 6, 2022, we no longer generate revenue.

#### Cost of Sales

Cost of sales during the three months ended September 30, 2022 consisted of the costs of various materials used and services performed, including employee costs and overhead costs to fulfill Nano’s sales contracts. Following the completion of the sale of Nano on September 6, 2022, we no longer generate revenue and incur associated cost of sales.

#### Engineering Services Costs

Total engineering services costs increased by $5.0 million, or 35%, to $19.5 million for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. The increase was primarily attributable to a $2.4 million increase in AIT facilities and activities and engineering development centers costs including managing mission operations and ground infrastructure, a $1.7 million increase in payroll and employee related costs, including stock-based compensation expense, due to an increase in headcount, and an increase of $0.9 million in costs related to prototyping and preparation for production activities, and travel costs.

#### General and Administrative Costs

Total general and administrative costs decreased by $1.9 million, or 15%, to $11.0 million for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. The decrease was primarily driven by elimination of $1.9 million of costs related to Nano as Nano is no longer consolidated following its sale in September 2022.

#### Research and Development Costs

Total R&D costs decreased by $4.1 million, or 30%, to $9.4 million for the three months ended September 30, 2023 as compared to three months ended September 30, 2022. R&D costs during the three months ended September 30, 2023 primarily relate to completion of design and development of BB Block 1 satellites, ongoing design and development of certain subsystems for the BB Block 2 satellites, ASIC design, and development of ground infrastructure programs for commercial readiness. R&D costs during the three months ended September 30, 2022 primarily relate to the design and development of the BB Block 1 and BB Block 2 satellites and ASIC design. The decrease in R&D costs was primarily due to substantial completion of design and development of certain subsystems for the BB Block 2 satellites and reduced expenditure on the ASIC program during the current period, offset by an increase in costs related to ground infrastructure programs for commercial readiness. R&D costs in the future periods will be driven by the remaining development programs of the BB Block 2 satellites which are expected to fluctuate quarter over quarter depending on the completion of milestones.

#### Depreciation and Amortization

Total depreciation and amortization expense increased by $17.9 million, or 1524%, to $19.0 million for the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. The increase was primarily due to commencing depreciation of the BW3 test satellite from April 25, 2023, the date on which we determined that BW3 had met its intended use.

#### Gain (Loss) on Remeasurement of Warrant Liabilities

The decrease in fair value of warrant liabilities resulted in a gain of $7.5 million for the three months ended September 30, 2023 as compared to the loss of $15.9 million for the three months ended September 30, 2022.

#### Other Income, net

Total other income, net decreased by $23.9 million, or 96%, to $1.0 million for the three months ended September 30, 2023, as compared to the other income, net of $24.9 million for the three months ended September 30, 2022. The decrease was primarily attributed to the net gain of $24.6 million recognized in connection with the sale of Nano on September 6, 2022 and an increase of $1.3 million in interest expense incurred in connection with our debt, offset by an increase of $1.1 million in interest income from the cash and cash equivalents held at financial institutions, $0.6 million of transaction costs incurred in connection with the Common Stock Purchase Agreement in the three months ended September 30, 2022, and an increase of $0.3 million in foreign exchange gain and other non-operating income.

#### Income Tax Expense

The income tax expense was $0.3 million for the three months ended September 30, 2023 as compared to $0.6 million for the three months ended September 30, 2022. The consolidated effective tax rate for the three months ended September 30, 2023 and September 30, 2022 was (0.53%) and (1.75%), respectively. Refer to Note 11: Income Taxes in the accompanying notes to the unaudited condensed consolidated financial statements for further information.

#### Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest was $29.8 million for the three months ended September 30, 2023 as compared to $(22.3) million in the three months ended September 30, 2022. This increase in net loss correlates with the increase in net loss generated at AST LLC given the noncontrolling interest represents a portion of such net loss.

### Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

We report our results of operations under one operating segment. The following table sets forth a summary of our unaudited condensed consolidated statements of operations for the nine months ended September 30, 2023 and 2022 (in thousands) and the discussion that follows compares the nine months ended September 30, 2023 to the nine months ended September 30, 2022.

*(unaudited)*

|  | For the Nine Months Ended September 30, 2023 | 2022 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| **Revenues** | $- | $13,825 | $(13,825) | (100)% |
| **Cost of sales (exclusive of items shown separately below)** | - | 6,714 | (6,714) | (100) |
| **Gross profit** | - | 7,111 | (7,111) | (100) |
| **Operating expenses:** |  |  |  |  |
| Engineering services costs | 58,818 | 38,208 | 20,610 | 54 |
| General and administrative costs | 31,073 | 37,634 | (6,561) | (17) |
| Research and development costs | 36,721 | 30,969 | 5,752 | 19 |
| Depreciation and amortization | 34,877 | 3,457 | 31,420 | 909 |
| **Total operating expenses** | 161,489 | 110,268 | 51,221 | 46 |
| **Other income (expense):** |  |  |  |  |
| Gain on remeasurement of warrant liabilities | 21,454 | 1,669 | 19,785 | 1,185 |
| Other (expense) income, net | (5,926) | 24,211 | (30,137) | (124) |
| **Total other income (expense), net** | 15,528 | 25,880 | (10,352) | (40) |
| **Loss before income tax benefit (expense)** | (145,961) | (77,277) | (68,684) | (89) |
| Income tax benefit (expense) | 408 | (747) | 1,155 | 155 |
| **Net loss before allocation to noncontrolling interest** | (145,553) | (78,024) | (67,529) | (87) |
| Net loss attributable to noncontrolling interest | (89,918) | (54,613) | (35,305) | (65) |
| **Net loss attributable to common stockholders** | $(55,635) | $(23,411) | $(32,224) | (138)% |

#### Revenues

All revenues during the nine months ended September 30, 2022 were generated from the development and manufacture of satellite technology, and ancillary sales and services globally by our former subsidiary, Nano. Following the completion of the sale of Nano on September 6, 2022, we no longer generate revenue.

#### Cost of Sales

Cost of sales during the nine months ended September 30, 2022 consisted of the costs of various materials used and services performed, including employee costs and overhead costs to fulfill Nano’s sales contracts. Following the completion of the sale of Nano on September 6, 2022, we no longer generate revenue and incur associated cost of sales.

#### Engineering Services Costs

Total engineering services costs increased by $20.6 million, or 54%, to $58.8 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. The increase was primarily attributable to a $9.4 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 related to the BW3 test satellite, an increase of $7.4 million in AIT facilities and activities and engineering development centers costs including managing mission operations and ground infrastructure, and an increase of $3.8 million in costs related to prototyping and preparation for production activities, and travel expenses.

#### General and Administrative Costs

Total general and administrative costs decreased by $6.6 million, or 17%, to $31.1 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. The decrease was primarily driven by elimination of $5.7 million of costs related to Nano as Nano is no longer consolidated following its sale in September 2022, and a decrease of $0.9 million in travel expenses.

#### Research and Development Costs

Total R&D costs increased by $5.8 million, or 19%, to $36.7 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. R&D costs during the nine months ended September 30, 2023 primarily relate to the design and development of BB Block 1 satellites, design and development of certain subsystems for the BB Block 2 satellites, ASIC design, and development of ground infrastructure programs for commercial readiness. R&D costs during the nine months ended September 30, 2022 primarily relate to design and development of the BB satellites and ASIC design. The increase in R&D costs was primarily due to completing the design and development of the BB Block 1 satellites and the development of ground infrastructure programs for commercial readiness, offset by the reduced expenditure on the ASIC program during the current period.

#### Depreciation and Amortization

Total depreciation and amortization expense increased by $31.4 million, or 909%, to $34.9 million for the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. The increase was primarily due to commencing depreciation of the BW3 test satellite from April 25, 2023, the date on which we determined that BW3 had met its intended use.

#### Gain on Remeasurement of Warrant Liabilities

Decrease in fair value of warrant liabilities resulted in a gain of $21.5 million for the nine months ended September 30, 2023 as compared to a gain of $1.7 million during the nine months ended September 30, 2022.

#### Other (Expense) Income, net

Total other expense, net was $5.9 million for the nine months ended September 30, 2023 as compared to other income, net of $24.2 million for the nine months ended September 30, 2022, a decrease of $30.1 million, or 124%. The decrease was primarily due to the net gain of $24.6 million recognized in connection with the sale of Nano on September 6, 2022, a $10.0 million payment made to Rakuten in accordance with the Rakuten Agreement (as defined herein), an increase of $1.3 million in interest expense incurred in connection with our debt arrangements, and an increase of $0.3 million in foreign exchange loss and other non-operating income, offset by an increase of $4.7 million in interest income from the cash and cash equivalents held at financial institutions and $1.4 million of transaction costs incurred in connection with the Common Stock Purchase Agreement during the nine months ended September 30, 2022.

#### Income Tax Benefit (Expense)

The income tax benefit was $0.4 million for the nine months ended September 30, 2023 as compared to the income tax expense of $0.7 million for the nine months ended September 30, 2022. The consolidated effective tax rate for the nine months ended September 30, 2023 and September 30, 2022 was 0.28% and (0.97%), respectively. Refer to Note 11: Income Taxes in the accompanying notes to the unaudited condensed consolidated financial statements for further information.

#### Net Loss Attributable to Noncontrolling Interest

Net loss attributable to noncontrolling interest was $89.9 million for the nine months ended September 30, 2023 as compared to $54.6 million for the nine months ended September 30, 2022. This increase in net loss correlates with the increase in net loss generated at AST LLC given the noncontrolling interest represents a portion of such net loss.

### Liquidity and Capital Resources

We do not expect to generate revenue in future periods until we launch the SpaceMobile Service and/or begin to resell gateway equipment. Accordingly, our current sources of liquidity are cash and cash equivalents on hand, access to equity programs currently in place, which consist of an Equity Line of Credit (as defined herein) and the ATM Equity Program (as defined herein). As of September 30, 2023, we had $135.7 million of cash and cash equivalents on hand, which included $2.4 million of restricted cash on hand. We believe our cash and cash equivalents on hand, together with our ability to raise capital through access to the Equity Line of Credit and the ATM Equity Program, will be sufficient to meet expected working capital needs, planned operating expenses and capital expenditures for a period of 12 months from the date of this Quarterly Report on Form 10-Q.

The design, assembly, integration, testing and launch of satellites and related ground infrastructure is capital-intensive. We currently estimate the materials and launch costs required for the design, assembly and launch of our first five Block 1 BB satellites to be approximately $115.0 million. The increase in costs from our prior estimate of $110.0 million was primarily the result of an increase in launch cost due to a potential customer requesting a change in the inclination of the satellites’ orbit so that our constellation could better serve the potential customer’s geographical regions. As of September 30, 2023, we had paid approximately 85% of the total estimated materials and launch costs.

We believe we need to launch and operate 25 BB satellites (5 Block 1 BB satellites and 20 Block 2 BB satellites) in order to provide coverage to the most commercially attractive MNO markets. We currently estimate we will need to raise approximately $550.0 million to $650.0 million to fund operating expenses and capital expenditures necessary to design, assemble and launch 20 Block 2 BB satellites and operate a constellation of 25 BB satellites and provide SpaceMobile service.

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. This modularity of our satellite configuration enables us to alter the timing and size of our satellite roll out and provides us flexibility to dynamically change our market plans and our capital requirements. As a result, we believe we have the ability to accelerate or slow down our business plans and expenditures depending upon the availability of capital to support our strategies.

We require capital to fund our operating expenses and capital expenditures and to service our debt. We are exploring opportunities to raise additional capital through the issuance of equity, equity linked securities, debt securities, secured loan facilities and debt financing or a combination of methods from commercial partners and/or financial institutions, including the use of our existing Equity Line of Credit and the ATM Equity Program.

Additional capital is necessary to fund ongoing operations, continue research, development and design efforts, improve infrastructure, and launch satellites. Our ability to access the capital markets and develop commercial revenues will influence the rate at which we deploy capital and pursue the development of our constellation and SpaceMobile service. If we successfully raise additional capital, we may accelerate certain development programs and other investments. There can be no assurance that additional funds will be available to us on favorable terms or at all. If we cannot raise additional funds, the modular nature of our capital expenditures and cost structures will lead us to delay or reduce or stop certain development activities and pursue the reduction of certain components of our operating expenses. If we cannot raise additional funds when needed, our financial condition, results of operations, business and prospects may be materially and adversely affected.

#### Commitments

As of September 30, 2023, we had contractual obligations under our debt arrangements to make future principal and interest payments, net of debt issuance costs of $58.8 million through January 2029. Refer to Note 6: Debt in the accompanying notes to the unaudited condensed consolidated financial statements for further information.

As of September 30, 2023, we had contractual obligations under our non-cancelable operating lease agreements, with lease terms expiring through November 2033. During the nine months ended September 30, 2023, we received control of two leased properties and renewed two leased properties, which increased the total required minimum lease payments by $9.6 million as compared to the total lease payments as of December 31, 2022 described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

As of September 30, 2023, we had contractual commitments with third parties in the aggregate amount of $44.3 million related to R&D programs, capital improvements, remaining installment of launch payments, and procurement of BB satellite components.

#### Common Stock Purchase Agreement

On May 6, 2022, we entered into the Common Stock Purchase Agreement (the “Common Stock Purchase Agreement” or “Equity Line of Credit”) with B. Riley Principal Capital, LLC (“B. Riley”) to sell, at our sole discretion, to B. Riley up to $75.0 million of shares of our Class A Common Stock at 97% of the volume weighted average price (“VWAP”) of the Class A Common Stock calculated in accordance with the Common Stock Purchase Agreement, over a period of 24 months subject to certain limitations and conditions contained in the Common Stock Purchase Agreement. Sales and timing of any sales of Class A Common Stock are solely at our election, and we are under no obligation to sell any securities to B. Riley under the Common Stock Purchase Agreement. We plan to raise capital, as and when needed, under the Common Stock Purchase Agreement at our sole discretion. 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. (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. 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. 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.

#### Term loan

In December 2021, concurrent with the purchase of real property and equipment in Midland, Texas, our wholly-owned subsidiary, AST & Science Texas, LLC (“AST Texas”), entered into a credit agreement with Lone Star State Bank of West Texas (the “Credit Agreement”) providing for a $5.0 million term loan secured by the property. Borrowings under the term loan bear interest at a fixed rate equal to 4.20% per annum until December 7, 2026, and from December 8, 2026 until December 8, 2028 at a fixed rate per annum equal to 4.20% plus adjustment if the index rate as defined in the Credit Agreement is greater than 4.20%, subject to a maximum interest rate of 4.90% per annum. Refer to Note 6: Debt in the accompanying notes to the unaudited condensed consolidated financial statements for further information.

The Credit Agreement contains certain customary events of default, and certain covenants that limit AST Texas’ ability to, among other things, create liens on collateral, consolidate, merge, sell, or otherwise dispose of all or substantially all of their assets; and enter into certain transactions with their affiliates. 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.

#### 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. In addition, a two-year collateral protection insurance policy was issued to the lenders and a cash premium based on a single digit percentage of the amount drawn was paid to the insurance provider thereunder (the “Cash Premium”). An additional amount of $51.5 million may be borrowed only to the extent we raise additional capital through equity raises and receive additional insurance coverage such that we have insurance coverage equal to at least the amount of borrowings under the credit facility.

The initial senior secured credit facility loan 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 borrowing amounts are payable at maturity on August 14, 2026 and are subject to mandatory prepayments upon the occurrence of certain specified events. For any additional borrowings of up to $51.5 million, we shall have the same interest rate, maturity date and other terms as the initial borrowings of $48.5 million drawn on the closing date.

Borrowings are secured by substantially all of our assets other than the assets of certain excluded subsidiaries. The Atlas Credit Agreement contains customary affirmative and negative covenants, requires us to maintain certain levels of liquidity, limits our ability to incur additional indebtedness, make restricted payments (including cash dividends on common stock), and sell or otherwise dispose of our assets, among other restrictions.

Upon closing, we received the 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 intend to use the net proceeds for general corporate purposes as permitted under the Atlas Credit Agreement.

#### Capital equipment loan

On August 14, 2023, we entered into a loan agreement with Lone Star State Bank of West Texas (“Lone Star”) as lender, providing for $15.0 million principal term loan commitment secured by certain real property fixtures and equipment in one of our Texas facilities (the “Lone Star Loan Agreement”).

Borrowings accrue interest at the Prime Rate plus 0.75%, subject to a ceiling rate. Interest payments are due and payable on a monthly basis, with interest payments beginning in September 2023 and principal payments beginning in April 2025. Principal repayments are due in 48 equal monthly installments until January 2029, the maturity date of the loan. In connection with the Lone Star Loan Agreement, we deposited a cash balance of $15.0 million in the Lone Star Bank Money Market Fund. This cash balance will be converted to restricted cash if we fail to maintain a consolidated balance of cash and cash equivalents of at least $75.0 million. This restricted cash will be used to offset against the term loan obligations if we fail to maintain a consolidated balance of cash and cash equivalents of at least $50.0 million. In addition, the Lone Star Loan Agreement includes certain customary affirmative and negative covenants.

We drew the entire $15.0 million facility on September 19, 2023 and incurred $0.1 million of transaction costs. We intend to use the net proceeds for general corporate purposes.

### Cash Flows

### Historical Cash Flows

The following table summarizes our sources and uses of cash for the nine months ended September 30, 2023 and 2022 (in thousands) (unaudited):

*(unaudited)*

|  | For the Nine Months Ended September 30, 2023 | 2022 |
| --- | ---: | ---: |
| Cash, cash equivalents, and restricted cash | $135,726 | $199,529 |
| Cash used in operating activities | $(124,041) | $(121,424) |
| Cash used in investing activities | (96,462) | (19,814) |
| Cash provided by financing activities | 117,368 | 17,298 |

#### Operating activities

Cash used in operating activities was $124.0 million for the nine months ended September 30, 2023, as compared to cash used in operating activities of $121.4 million for the nine months ended September 30, 2022. The $2.6 million increase in cash used in operating activities was attributable to an increase of $27.4 million in expenses to support expanded operations offset by a decrease of $24.8 million in working capital during the nine months ended September 30, 2023.

#### Investing activities

Cash used in investing activities was $96.5 million for the nine months ended September 30, 2023, as compared to cash used in investing activities of $19.8 million for the nine months ended September 30, 2022. The $76.7 million increase in cash used in investing activities was primarily attributable to a $50.7 million increase in purchases of property and equipment, including procurement of BB satellite materials for assembly of five Block 1 BB satellites and advance launch payments and the $26.0 million proceeds from sale of Nano, net of cash deconsolidated and transaction costs, in September 2022.

#### Financing activities

Cash provided by financing activities was $117.4 million during the nine months ended September 30, 2023, as compared to cash provided by financing activities of $17.3 million during the nine months ended September 30, 2022. Cash provided by financing activities for the nine months ended September 30, 2023 was primarily attributable to net proceeds from the public offering completed in June 2023, the sale of Class A Common Stock under the ATM Equity Program, and net proceeds from borrowings on the Atlas Credit Agreement and Lone Star Loan Agreement.

### Impact of inflation

While inflation may impact our capital and operating expenditures, we believe the effects of inflation, if any, on our results of operations and financial condition have not been significant. 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.

### Funding Requirements

We believe our existing cash and cash equivalents and remaining availability under to the Equity Line of Credit and ATM Equity Program will be sufficient to meet anticipated cash requirements for 12 months from the date hereof. However, our forecast of the period of time through which our financial resources will be adequate to support operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could expend capital resources sooner than we expect.

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 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.

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. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of stockholders will be, or could be, diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through commercial agreements, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies and/or future revenue streams, or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. Also, our ability to raise necessary financing could be impacted by recent geopolitical events, higher interest rate regime and inflationary economic conditions and their effects on the market conditions. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our commercialization efforts or grant rights to develop and market other services even if we would otherwise prefer to develop and market these services ourselves, or potentially discontinue operations.

### Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). Preparation of the financial statements requires our management to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on our unaudited condensed consolidated financial statements. For a discussion of our critical accounting policies, see “Critical Accounting Policies” in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022. Except for the BW3 capitalization policy update described below, there have been no other significant changes to the critical accounting policies as compared to those described therein.

### BlueWalker 3 Capitalization

We accounted for research and development costs related to the BW3 test satellite in accordance with ASC 730 – Research and Development (“ASC 730”). We determined there is an alternative future use for the BW3 test satellite as defined in this guidance. As such, certain costs related to the assembly of the BW3 test satellite were capitalized. We capitalized only those expenditures and ancillary costs that were directly attributable to assembly and testing and necessarily incurred to place the BW3 test satellite into its intended location and use. To date, capitalized expenditures included the costs for satellite parts, launch cost, and other non-recurring costs directly associated with the BW3 test satellite developments. The other non-recurring costs primarily included third-party engineers who were hired solely for the design, assembly and testing of the BW3 test satellite and were responsible for the value and progression of the project. The costs for internal, recurrent engineers and consultants were expensed as engineering services and not capitalized as these employees were not directly associated with the development of the BW3 test satellite. The capitalized costs were reported as construction in progress (“CIP”) on our unaudited condensed consolidated balance sheet until March 31, 2023. We determined that the BW3 test satellite was ready for its intended use on April 25, 2023 when it successfully completed two-way voice calls directly to standard unmodified smartphones using the BW3 test satellite, and performed initial compatibility tests on a variety of smartphones and devices. Accordingly, we reclassified the presentation of the capitalized costs of the BW3 test satellite from CIP to property and equipment in the unaudited condensed consolidated balance sheet as of June 30, 2023 and began depreciating the BW3 test satellite as of April 25, 2023 over its expected remaining useful life of approximately 16 months.

### Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2023.

## Market risk

As filed, 163 characters.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

## Controls and procedures

As filed, 1,472 characters.

### Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a–15(e) and 15d-15(e)) as of September 30, 2023. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2023.

### Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 252 characters.

As of September 30, 2023, there have been no material changes from the risk factors previously disclosed in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023.

Filed Nov 14, 2023.
Source: SEC EDGAR, the filing index for accession 0000950170-23-063737. Last ingested by Listed: Oct 30, 2026, 11:10 ET. No prices; not investment advice.