# AST SpaceMobile, Inc.: Form 10-Q for the period ended Mar 31, 2025 - Company: [AST SpaceMobile, Inc.](/companies/asts.md) (CIK 1780312) - Form: 10-Q - Filed: 2025-05-12 - Accepted by EDGAR: May 12, 2025, 16:52 ET - Period: 2025-03-31 - Accession: 0000950170-25-069403 - Inline XBRL: yes - Main document: https://www.sec.gov/Archives/edgar/data/1780312/000095017025069403/asts-20250331.htm - All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1780312/000095017025069403/ ## Figures reported in this filing Standardized XBRL line items for the period ended 2025-03-31. | Line item | Period | Value | XBRL concept | | --- | --- | ---: | --- | | Revenue | 3 months, 2025-01-01 to 2025-03-31 | $718.0k | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax | | Research and development | 3 months, 2025-01-01 to 2025-03-31 | $7.1m | us-gaap:ResearchAndDevelopmentExpense | | Income tax | 3 months, 2025-01-01 to 2025-03-31 | $168.0k | us-gaap:IncomeTaxExpenseBenefit | | Net income | 3 months, 2025-01-01 to 2025-03-31 | −$45.7m | us-gaap:NetIncomeLoss | | Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$28.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities | | Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $120.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | | Cash and equivalents | at 2025-03-31 | $873.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue | | Current assets | at 2025-03-31 | $894.6m | us-gaap:AssetsCurrent | | Total assets | at 2025-03-31 | $1.37bn | us-gaap:Assets | | Current liabilities | at 2025-03-31 | $84.2m | us-gaap:LiabilitiesCurrent | | Total liabilities | at 2025-03-31 | $603.0m | us-gaap:Liabilities | | Long-term debt | at 2025-03-31 | $462.2m | us-gaap:LongTermDebtNoncurrent | | Current portion of debt | at 2025-03-31 | $3.7m | us-gaap:LongTermDebtCurrent | | Shareholders' equity | at 2025-03-31 | $766.7m | us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | ## Management's discussion and analysis As filed, 65,967 characters. Except as otherwise noted or where the context requires otherwise, references in this report (this “Quarterly Report”) to “we,” “us” or the “Company” refer to AST SpaceMobile, Inc. and references to our “management” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Item 1 of this Quarterly Report and with our Annual Report on Form 10-K for the year ended December 31, 2024, including our audited consolidated financial statements and related notes contained therein. Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report are to, and all monetary amounts in this Quarterly 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 Quarterly Report 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,” “plan,” “predict,” “potential,” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report may include, for example, statements about: - our strategies and future financial performance, including our business plans or objectives, products and services, pricing, marketing plans, operating expenses, market trends, revenues, liquidity, cash flows and uses of cash and capital expenditures; - expected functionality of the SpaceMobile Service; - the timing of the assembly, integration and testing as well as regulatory approvals for the launch of our next generation of commercial BB satellites (“Block 2 BB satellites”); - anticipated timing and level of deployment of satellites and anticipated developments in technology included in our satellites; - anticipated demand and acceptance of mobile satellite services; - anticipated costs necessary to execute our business plan, many of which are preliminary estimates subject to change based upon a variety of factors, including but not limited to our success in deploying and testing our constellation of satellites; - anticipated timing of our needs for capital or expected incurrence of future costs; - prospective performance and commercial opportunities and competitors; - our ability to continue to raise funds to finance our operating expenses, working capital and capital expenditures; - commercial partnership acquisition and retention; - the negotiation of definitive agreements with MNOs and governmental entities relating to the SpaceMobile Service that would supersede preliminary agreements and memoranda of understanding; - our success in retaining or recruiting, or changes required in, our officers, key employees or directors; - our expansion plans and opportunities, including the size of our addressable market; - our ability to comply with domestic and foreign regulatory regimes and the timing of obtaining regulatory approvals; - changes in applicable laws or regulations; - our ability to invest in growth initiatives and enter into new geographic markets; - the possibility we may be adversely affected by other economic, business and/or competitive factors; - the outcome of any legal proceedings that may be instituted against us; - our ability to deal appropriately with conflicts of interest in the ordinary course of our business; - our ability to consummate the proposed strategic transaction with Ligado, including our ability to realize the anticipated benefits of our proposed transaction with Ligado and to raise the contemplated financing to fund such transaction; and - changes in U.S. trade policy, including changes to existing trade agreements and any resulting changes in international trade relations. 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, 2024 and in Part II, Item 1A. Risk Factors included in this Quarterly Report. 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 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. 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”). On March 22, 2025, we and certain of our subsidiaries entered into certain definitive agreements with Ligado Networks LLC (“Ligado LLC”) and its subsidiaries (together with Ligado LLC, “Ligado”) for usage rights for mid-band spectrum. Following the approval of the United States Bankruptcy Court for the District of Delaware and subject to the completion of certain conditions, we expect our network will be enhanced by our long-term access to up to 45 MHz of the lower mid-band satellite spectrum in the United States and Canada through our usage agreements. As of March 31, 2025, our IP portfolio consists of more than 3,650 patent and patent pending claims worldwide, of which approximately 1,650 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. 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 MNOs or will be able to purchase a plan directly with their existing mobile provider. We intend to seek to use a revenue-sharing business model for the 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 user (“ARPU”). We also 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. To this end, we have entered into agreements with prime contractors for the United States (“U.S.”) government to perform certain tasks, including a new contract award entered in February 2025 with the United States Space Development Agency (“SDA”) through a prime contractor with total expected revenue of $43.0 million to provide certain testing services utilizing the five Block 1 BB satellites (defined below) and one next generation Block 2 BB satellite and a new contract award entered in April 2025 with the Defense Innovation Unit (“DIU”) through a prime contractor with total expected revenue of up to approximately $20.0 million for SpaceMobile capabilities with multiple U.S. government agencies in support of government communications over land, sea, and air. We intend to seek to enter into other similar agreements with the U.S. government, either directly or through prime contractors, to develop and test certain non-communication applications and, once qualified, provide certain non-communication and communication services through our satellites. 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. We launched our Blue Walker 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. Using the BW3 test satellite, we successfully completed two-way 5G voice calls directly to standard unmodified smartphones, achieved repeated successful download speeds of above 21 Mbps to standard unmodified smartphones and spectral efficiency of approximately 3 bits per second per hertz. We have also successfully completed initial in-orbit and ground testing for non-communication government applications. 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. 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. In October 2024, we completed the deployment of the communication phased array antennas and Q/V antennas in orbit and performed a series of monitoring tests and activities to confirm the successful initial operations of the Block 1 BB satellites. In January 2025, we successfully made the first SpaceMobile video call from space with Vodafone using standard unmodified smartphones. In February 2025, we completed the voice and video call tests on standard unmodified smartphones with AT&T and Verizon in the U.S. and also completed the tests for non-communication applications for the U.S. government. All five Block 1 BB satellites have participated in the tests at various stages. In April 2025, together with Rakuten Mobile, Inc., we successfully conducted a two-way broadband video call in front of a live audience using unmodified smartphones on the SpaceMobile network enabled by a Block 1 BB satellite in orbit today. We expect to continue testing for SpaceMobile Service automation including beta testing prior to rollout of initial noncontinuous SpaceMobile Service in select markets including the United States, Europe and Japan. The SpaceMobile Service has not been launched and therefore has not yet generated any revenue. 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. 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 received an initial license from the Federal Communications Commission (“FCC”) to launch and operate the Block 1 BB satellites using S- and UHF-band frequencies to support orbit raising maneuvers and Telemetry, Tracking, and Command operations, and to employ the V-band for routine gateway feeder link operations. In the United States, we obtained special temporary authorities (“STAs”) for service link operations from the FCC, under which we have begun testing in the United States employing low-band spectrum from AT&T and Verizon and received FCC authorization to test our space-based cellular broadband network on Band 14 - the dedicated spectrum for first responders and the public safety community on FirstNet, built with AT&T. We have also obtained the STAs in Turkey and the United Kingdom with Vodafone and in Japan with Rakuten. Further, we have submitted Part 5 applications to the FCC for launch of our first next-generation Block 2 BB satellite. Before we begin providing full commercial SpaceMobile Service, we will need to obtain additional approvals from the FCC including our application to request authority to add additional satellites and frequencies for use with the SpaceMobile Service in the United States, including the incorporation of Verizon frequencies, and we will need to obtain additional approvals from other regulatory authorities outside the United States. We have entered into a space-based wireless connectivity agreement with AT&T to provide SpaceMobile Service to AT&T’s end users for use within the continental United States (excluding Alaska) and Hawaii and with Vodafone to provide SpaceMobile Services to Vodafone’s end users for use outside the United States. 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. 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. Beginning in the fourth quarter of 2024, we began to generate revenue from the resale of gateway equipment and associated services to MNOs. 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 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. 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. 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. We have reached key production milestones and are in the final production preparation phase of the first batch of the ASIC chip. 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 Field Programmable Gate Arrays (“FPGA”) chip. We have entered into launch agreements with multiple launch service providers which will allow us to accelerate a planned launch campaign during 2025 and 2026 to launch over 60 Block 2 BB satellites. We have commenced assembling and testing the Block 2 BB satellites in accordance with our plan to meet this launch campaign to enable Continuous SpaceMobile Service, which means with respect to a particular geographical market close to 100% reliable persistent service across the geographical areas within certain latitudes and a substantially high degree of reliable persistent service across the remaining geographical areas outside the said latitudes, coverage across key markets such as the United States, Europe, Japan and other strategic markets as well as to facilitate U.S. government applications. We expect to ship the first next-generation Block 2 BB satellite (“FM 1”) to the launch provider during the second quarter of 2025 for a launch scheduled in July 2025, which will commence our launch campaign of over 60 Block 2 BB satellites in 2025 through 2026 at a cadence of one launch approximately every one to two months on average. The timing of shipment and launch of the Block 2 BB satellites are contingent on a number of factors including satisfactory and timely completion of the assembly and testing of the Block 2 BB satellites, regulatory approvals for the shipment and launch, availability of capital, readiness of the launch vehicle, logistics 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 markets 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 are leveraging the technological expertise and manufacturing know-how derived from the assembly and testing of our Block 1 BB satellites in the development and assembly of our Block 2 BB satellites. We are actively engaged in planning and procurement of materials needed for assembly and readiness of the Block 2 BB satellites to meet our planned launches in 2025 and 2026. We have placed orders for procurement of substantially all materials and components needed, in accordance with our production plan, for the assembly, integration and testing of the next 20 Block 2 BB satellites. In addition, subject to our ability to raise additional capital, we plan to continue to accelerate the procurement of components and materials needed for us to complete fully assembled microns and phased array for 53 Block 2 BB satellites and complete 40 fully integrated and assembled Block 2 BB satellites. Our manufacturing, assembly, and testing strategy for Block 2 BB satellites includes continuous production and assembly of various components and sub systems for economies of scale, cost efficiencies, and unlocking capacity constraints, to build sufficient quantity of components and sub systems readily available on hand to be able to complete the final integration and testing of the required number of Block 2 BB satellites closer to the planned launch timelines. As of the date of this Quarterly Report, we have completed production of various components and sub systems and have completed assembly of microns for multiple Block 2 BB satellites. We will continue with manufacturing, assembly, integration and testing of the Block 2 BB satellites at our current capacity and once we complete our planned investments to increase the capacity to assemble, integrate, and test up to six Block 2 BB satellites per month in 2025, we plan to accelerate the manufacturing, assembly, integration and testing of the Block 2 BB satellites to meet our planned launches in 2025 and 2026. 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 believe the operation of a constellation of 25 BB satellites will enable us to potentially generate cash flows from operating activities to further support the buildup of the remaining constellation. We believe we can enable Continuous SpaceMobile Service coverage across key markets such as the United States, Europe, Japan and other strategic markets with the launch and operation of a total of approximately 45 to 60 BB satellites, and achieve Continuous SpaceMobile Service in all targeted geographical markets to meet our long term business goals with the launch and operation of a total of approximately 90 BB satellites. 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. 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 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. 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, 2024 and in Part II, “Item 1A. Risk Factors” included in this Quarterly Report. ### Recent Developments #### Spectrum Usage Rights Transaction On January 5, 2025, AST LLC entered into a Strategic Collaboration Term Sheet (defined below) with Ligado LLC under which we will receive long-term access to up to 45 MHz of lower mid-band spectrum in the United States and Canada for direct-to-device satellite applications. On March 22, 2025, we and certain of our subsidiaries entered into certain Definitive Agreements (defined below) with Ligado for usage rights for mid-band spectrum and issued 4,714,226 Penny Warrants (defined below) exercisable for shares of our Class A Common Stock, subject to a 12-month lock-up. Refer to discussion under “Spectrum Usage Rights Transactions” below for further details. #### DIU Agreement On April 25, 2025, a subsidiary of ours entered a new contract with the DIU through a prime contractor with total expected revenue of up to approximately $20.0 million for SpaceMobile capabilities with multiple U.S. government agencies in support of government communications over land, sea, and air. ### Impact of Global Macroeconomic Conditions 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. Changes in the prices of satellite materials due to inflation, supply chain challenges, tariffs, 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 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. Our operations in Israel constitute approximately 1% of our consolidated total assets and approximately 11% 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. 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. We believe that our future results of operations could differ materially from the historical results of operations as we initiate the limited, noncontinuous SpaceMobile Service in certain targeted geographical markets, secure additional contracts with the U.S. government or its prime contractors for non-commercial use of our BB satellites, complete the development of the Block 2 BB satellites, increase our capacity and scale to manufacture BB satellites for the planned launches, launch the Block 2 BB satellites, enter into commercial arrangements with additional MNOs, and close our proposed transaction with Ligado. ### 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 limited, noncontinuous SpaceMobile Service. During the three months ended March 31, 2025, we recognized $0.7 million of revenue from performance obligations completed under agreements with prime contractors for U.S. government contracts and from resale of gateway equipment to a mobile network operator. We expect to continue to recognize revenue under these agreements with prime contractors for U.S. government contracts as and when we complete the remaining performance obligations. 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. 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. #### 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 are charged to expense as incurred. 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 and supplies consumed in the R&D activities. 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 the Block 1 BB satellites. We began depreciating the Block 1 BB satellites as of October 29, 2024 over their expected remaining useful lives of approximately 60 months. #### (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 unaudited condensed consolidated statements of operations. #### Interest Expense Interest expense consists of cash interest payments and amortization of debt issuance costs associated with our debt arrangements. #### Interest Income Interest income consists of interest earned on cash and cash equivalents held in interest bearing demand deposit accounts. #### Other (Expense) Income, Net Other income (expense), net primarily consists of non-operating expense and income, including foreign exchange gains or losses. #### 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 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 us. We attribute a portion of net income or loss generated at AST LLC to the noncontrolling interest based on their ownership interests. As of March 31, 2025 and December 31, 2024, the noncontrolling interest in AST LLC was approximately 27.4% and 30.1%, respectively. The decrease in noncontrolling interest percentage during the three months ended March 31, 2025 was a result of the issuance of Class A Common Stock due to the conversion of the 2034 Convertible Notes, the issuance of Class A Common Stock under the 2024 Sales Agreement (as defined below), the redemption of AST LLC Common Units in exchange for Class A Common Stock, the exercise of options for Class A Common Stock and the vesting of restricted stock units. ### Results of Operations 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 March 31, 2025 and 2024 (in thousands), and the discussion that follows compares the three months ended March 31, 2025 to the three months ended March 31, 2024. *(unaudited)* | | For the Three months ended March 31, 2025 | 2024 | $ Change | % Change | | --- | ---: | ---: | ---: | ---: | | **Revenues** | $718 | $500 | $218 | 44% | | **Operating expenses:** | | | | | | Engineering services costs | 27,204 | 19,511 | 7,693 | 39 | | General and administrative costs | 18,384 | 12,287 | 6,097 | 50 | | Research and development costs | 7,135 | 4,257 | 2,878 | 68 | | Depreciation and amortization | 10,958 | 19,945 | (8,987) | (45) | | **Total operating expenses** | 63,681 | 56,000 | 7,681 | 14 | | **Other income (expense):** | | | | | | (Loss) gain on remeasurement of warrant liabilities | (3,206) | 18,214 | (21,420) | \* | | Interest expense | (4,736) | (4,511) | (225) | 5 | | Interest income | 8,196 | 2,289 | 5,907 | \* | | Other (expense) income, net | (751) | (2) | (749) | \* | | **Total other income (expense), net** | (497) | 15,990 | (16,487) | \* | | **Loss before income tax expense** | (63,460) | (39,510) | (23,950) | 61 | | Income tax expense | (168) | (294) | 126 | (43) | | **Net loss before allocation to noncontrolling interest** | (63,628) | (39,804) | (23,824) | 60 | | Net loss attributable to noncontrolling interest | (17,922) | (20,074) | 2,152 | (11) | | **Net loss attributable to common stockholders** | $(45,706) | $(19,730) | $(25,976) | \*% | \* Percentage greater than or equal to 100 or not meaningful #### Revenues Revenues increased by $0.2 million, or 44%, to $0.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase in revenues was driven by a $0.4 million increase from resale of gateway equipment to a mobile network operator, partially offset by a $0.2 million decrease in revenues from agreements with prime contractors for U.S. government contracts. #### Engineering Services Costs Total engineering services costs increased by $7.7 million, or 39%, to $27.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase was attributable to a $4.5 million increase in payroll and employee related costs driven by an increase in head count, a $1.2 million increase in AIT facilities and activities and engineering development centers costs, a $1.1 million increase in consultants and professional fees, and a $0.9 million increase from license and other costs. #### General and Administrative Costs Total general and administrative costs increased by $6.1 million, or 50%, to $18.4 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase was attributable to a $4.8 million increase in consultants and professional services, a $1.1 million increase in payroll and employee related costs driven by an increase in head count, and a $0.2 million increase in other expenses. #### Research and Development Costs Total R&D costs increased by $2.9 million, or 68% to $7.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase in R&D costs was primarily attributable to the development and design of the Block 2 BB satellites beyond FM1. #### Depreciation and Amortization Total depreciation and amortization expense decreased by $9.0 million, or 45%, to $11.0 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The decrease was due to a lower depreciation expense recognized for the Block 1 BB satellites which we launched in September 2024 than the depreciation expense recognized in the comparative period for the BW3 test satellite which was fully depreciated as of August 30, 2024. #### (Loss) Gain on Remeasurement of Warrant Liabilities The fair value adjustment for Private Placement Warrants outstanding at March 31, 2025 resulted in a loss of $3.2 million for the three months ended March 31, 2025 as compared to a gain of $18.2 million for the three months ended March 31, 2024. The increase in loss was largely driven by changes in our share price. #### Interest Expense Interest expense increased by $0.2 million, or 5%, to $4.7 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The small increase in interest expense was largely due to an increase in interest expense recognized on the 2032 Convertible Notes we issued on January 27, 2025, partially offset by decreases in interest expense recognized on the 2034 Convertible Notes which we converted into shares of our Class A Common Stock on January 22, 2025 and on a senior secured credit facility which we terminated on November 13, 2024. #### Interest Income Interest income increased by $5.9 million to $8.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. The increase was driven by a higher cash and cash equivalents balance held in interest bearing short-term money market funds. #### Other (Expense) Income, Net Other expense, net was $0.7 million for the three months ended March 31, 2025, as compared to less than $0.1 million for the three months ended March 31, 2024. The increase in other expense, net was primarily due to an increase in foreign exchange losses. #### Income Tax Expense The provision for income taxes was $0.2 million and $0.3 million for the three months ended March 31, 2025 and 2024, respectively. The consolidated effective tax rate for the three months ended March 31, 2025 and March 31, 2024 was (0.26%) and (0.74)%, 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 $17.9 million for the three months ended March 31, 2025 as compared to $20.1 million in the three months ended March 31, 2024. This decrease in net loss attributable to noncontrolling interest was due to a decrease in noncontrolling interest’s ownership percentage in AST LLC, partially offset by an increase in net loss generated at AST LLC. ### Liquidity and Capital Resources Our current sources of liquidity are cash and cash equivalents on hand. As of March 31, 2025, we had $874.5 million of cash and cash equivalents on hand, including $0.7 million of restricted cash. We believe our existing cash and cash equivalents on hand will be sufficient to meet our anticipated cash requirements, including current working capital needs, planned operating expenses and capital expenditures for a period of the next 12 months from the date of this Quarterly Report. The design, assembly, integration, testing and launch of satellites and related ground infrastructure is capital intensive. We currently estimate the average capital costs, consisting of direct materials and launch costs, for a constellation of over 90 Block 2 BB satellites to be approximately $21.0 million to $23.0 million per satellite, an increase from previous estimates of $19.0 million to $21.0 million per satellite, reflecting anticipated initial launch costs higher than that range, driven by recently secured near-term launch capacity and trending down over time as we optimize payloads and related launch terms and our ongoing evaluation of a multitude of launch opportunities, and anticipated higher direct materials cost due to recently announced tariffs. 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. 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. 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 noncontinuous coverage to the most commercially attractive MNO markets and potentially generate cash flow from operating activities. We continue to believe that we are fully funded for operating expenses and capital expenditures necessary to design, manufacture, and launch 20 Block 2 BB satellites and operate a constellation of 25 BB satellites. We believe the operation of a constellation of 25 BB satellites will enable us to secure additional sources of financing, including potentially generating cash flows from operating activities to help fund the buildup of the remaining constellation along with our cash on hand that we have begun to deploy in support of manufacturing up to 40 Block 2 BB satellites. Our launch agreements with multiple launch providers allow us to accelerate a planned launch campaign during 2025 and 2026 to launch over 60 Block 2 BB satellites. Subject to our ability to raise additional capital, this provides us with a flexible option to opportunistically accelerate the buildup of the constellation of over 65 BB satellites (five Block 1 BB satellites and over 60 Block 2 BB satellites) to enable Continuous SpaceMobile Service coverage across key markets such as the United States, Europe, Japan and other strategic markets as well as to facilitate U.S. government applications. 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. 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 capital requirements. As a result, we believe we have the ability to accelerate or slow down our business plan depending upon the availability of capital to support our strategies. 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. 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 when needed in the future, our financial condition, results of operations, business and prospects may be materially and adversely affected. #### Spectrum Usage Rights Transactions On January 5, 2025, AST LLC entered into a binding agreement (the “Strategic Collaboration Term Sheet”) with Ligado LLC under which we will receive long-term access to up to 45 MHz of lower mid-band spectrum in the United States and Canada for direct-to-device satellite applications. The Strategic Collaboration Term Sheet was entered into as part of the restructuring of Ligado LLC, which together with certain of its direct and indirect subsidiaries filed voluntary petitions for relief under Chapter 11 of United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware on January 5, 2025. The transactions contemplated in the Strategic Collaboration Term Sheet (collectively, the “Spectrum Usage Rights Transactions”) are subject to the approval of the bankruptcy court. On March 22, 2025, pursuant to the Strategic Collaboration Term Sheet, (1) we, AST LLC, Spectrum USA I, LLC, a subsidiary of AST LLC (“SpectrumCo”), and Ligado LLC entered into a Framework Agreement (the “Framework Agreement”), (2) SpectrumCo and Ligado LLC entered into a Strategic Collaboration and Spectrum Usage Agreement (the “Collaboration Agreement”), (3) AST LLC and One Dot Six LLC entered into a Spectrum Usage Rights Agreement (the “Usage Rights Agreement”), (4) we, Cerberus Capital Management, L.P. (“Cerberus”), and Fortress Credit Advisors LLC (“Fortress”) entered into a Side Letter Agreement (“Governance Side Letter”) and (5) we issued 4,714,226 penny warrants (“Penny Warrants”) exercisable for shares of our Class A Common Stock at an exercise price per share equal to $0.01 per share, subject to a 12-month lock-up (the “Warrant”, and together with the Framework Agreement, Collaboration Agreement, Usage Rights Agreement and Governance Side Letter, collectively, the “Definitive Agreements”). Pursuant to the Collaboration Agreement and subject to bankruptcy court approval of the Spectrum Usage Rights Transactions, among other things, Ligado LLC will provide to SpectrumCo the right to use its satellites, ground station assets and L-band spectrum, including substantially all of the capacity on SkyTerra-1 and, in exchange, SpectrumCo will pay to Ligado LLC (1) at least $80.0 million in annual payments in cash for use of the L-band spectrum; provided, that any portion of such amount in excess of the amount owed by Ligado to utilize the L-band spectrum may be paid in our equity rather than cash for three years after closing; provided, further, that such usage-right consideration amount covers 100% of amounts due from Ligado to utilize the L-band spectrum and (2) certain revenue share payments derived from the usage of the L-band spectrum and from North American operations, in each case until the earlier of (x) December 31, 2035 (which can be renewed to December 31, 2107 at SpectrumCo’s election) or (y) the termination of the Collaboration Agreement. Pursuant to the Framework Agreement, among other things, in consideration of the rights granted to the SpectrumCo under the Collaboration Agreement, we will pay to Ligado LLC: (1) $350.0 million in cash and (2) at our option, $200.0 million either in cash, convertible notes on market terms or a combination of the foregoing, in each case payable at the time specified in the Framework Agreement and on the terms and subject to the conditions set forth therein. The Framework Agreement also includes a break-up fee payable to us in the event that the Framework Agreement is terminated by us if the resolution of certain Ligado litigation materially adversely impacts the use of L-band spectrum by SpectrumCo. In addition, pursuant to the Spectrum Usage Agreement and subject to bankruptcy court approval of the Spectrum Usage Rights Transactions, (1) AST LLC will have access to spectrum under the Master Agreement (1670-1675 MHz Spectrum), dated as of July 16, 2007, by and among Crown Castle MM Holding LLC, OP LLC and TVCC One Six Holdings LLC (succeeded by One Dot Six LLC), as amended on December 2, 2022 and the Amended and Restated Long-Term De Facto Transfer Lease Agreement, dated as of December 2, 2022, by and between OP, LLC and One Dot Six LLC (collectively, the “CCI Agreement”) for space to ground use on a preemptable basis, and, in exchange, (2) AST LLC will pay an annual usage fee amount due in cash plus a 30% premium with respect to each such payment payable in our Class A Common Stock. For seven years after the execution of the Usage Rights Agreement, AST LLC will have the right to exercise an option to purchase spectrum under the CCI Agreement, so long as AST LLC pays Ligado the purchase price with respect to such option plus a premium of 30% with respect to such purchase price payable in our Class A Common Stock. To support the consideration payable under the Framework Agreement, on March 5, 2025 (“Commitment Date”), SpectrumCo received a $550.0 million (“Loan Amount”) institutional financing commitment in the form of a single draw non-recourse senior-secured delayed-draw term loan facility (“Facility”), available for nineteen months from the Commitment Date with an option to extend for an additional six months (“Availability Period”). The Facility includes a commitment fee, payable in cash or shares of our Class A Common Stock at our option, that is 2% of the Loan Amount due on the Commitment Date and upon entry into definitive documentation for the Facility (“Closing Date”). As of March 31, 2025, we paid $2.8 million of the commitment fee in cash. If we terminate the Facility prior to the end of the Availability Period, we will pay a termination fee, payable in cash or shares of our Class A Common Stock at our option, ranging from 1% to 5% of the Loan Amount depending on when we terminate the Facility. The Facility also includes an upfront fee that is 3% of the Loan Amount when we draw on the Facility as a reduction to proceeds received and some other fees that become payable starting from the Closing Date. #### Commitments During the three months ended March 31, 2025, there were no material changes in the contractual minimum principal and interest payments required on all of our outstanding debt and operating leases described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, other than the full conversion of the 2034 Convertible Notes into shares of our Class A Common Stock as described below. As of March 31, 2025, we had contractual commitments with third parties in the aggregate amount of approximately $300.0 million related to procurement of BB satellite components, R&D programs, operational services, and capital improvements for meeting our goal of production of 40 fully integrated BB satellites and microns for 53 BB satellites. We have various rights to adjust the quantity of satellite components on the purchase orders and/or change the delivery timelines in accordance with our ongoing business plan. We also have rights to terminate these agreements in accordance with the terms of the agreement and potentially incur a termination fee in certain cases. In addition, we have launch agreements under which payments are due at scheduled milestones over the duration of the agreement, including certain milestones where payments are contingent and not due unless launch providers meet the milestones as defined in the agreement. As of March 31, 2025, the minimum commitments related to the future launches are approximately $300.0 - $350.0 million. We have contractual rights to cancel these launches or terminate the related agreements at any time by paying a termination fee, and in certain cases without incurring a termination fee, and any excess payments made to the launch providers for these launches will be refunded to us. #### 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. Riley Securities, Inc., Barclays Capital Inc., BofA Securities, Inc., Cantor Fitzgerald & Co., Deutsche Bank Securities Inc., Roth Capital Partners, LLC, Scotia Capital (USA) Inc. and UBS Securities LLC (collectively, the “agents”) to sell shares of the Class A Common Stock having an aggregate sale price of up to $400.0 million through an “at the market offering” program under which the agents 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. Under the 2024 Sales Agreement, we issued 1,989,966 shares of our Class A Common Stock during the three months ended March 31, 2025, and received proceeds of $54.8 million, net of commissions paid to the agents and transaction costs. During the three months ended March 31, 2025, we paid commission of $1.4 million to the agents with respect to such sales and incurred initial transaction costs of $0.1 million. Proceeds from the sale of the Class A Common Stock under the 2024 Sales Agreement were used for general corporate purposes. As of the date of this Quarterly Report, we have less than $0.1 million available under the 2024 ATM Equity Program. #### 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 (“Lone Star”) providing for a $5.0 million term loan secured by the property (the “Term Loan Credit Agreement”). 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 Term Loan Credit Agreement) is greater than 4.20%, subject to a maximum interest rate of 4.90% per annum. The Term Loan 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. #### Capital Equipment Loan On August 14, 2023, we entered into a loan agreement with 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. Interest payments began in September 2023 and principal payments began 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. The net proceeds were used for general corporate purposes. #### 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. 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. We elected to pay interest on the 2034 Convertible Notes in kind on June 30, 2024, resulting in the principal amount of the 2034 Convertible Notes being increased by approximately $3.0 million. Interest will accrue on such increased principal amount in subsequent interest periods. We elected to pay interest on the 2034 Convertible Notes in cash on December 30, 2024. The net proceeds of the 2034 Convertible Notes were used for general corporate purposes. On January 22, 2025, we notified the holders of the 2034 Convertible Notes that we exercised our option to require all of such notes to be converted into shares of our Class A Common Stock. In the first quarter of 2025, the then outstanding principal amount of the 2034 Convertible Notes, which included an additional interest accrual of approximately $0.5 million, was converted into 25,818,541 shares of our Class A Common Stock and our obligation under the 2034 Convertible Notes was automatically cancelled upon such share issuance. #### 2032 Convertible Notes On January 27, 2025, we issued $460.0 million aggregate principal amount of convertible senior notes due 2032 (the “2032 Convertible Notes”), including the exercise in full of the option granted to the initial purchasers to purchase up to $60.0 million aggregate principal amount of notes. The 2032 Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 4.25% per year, payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2025. The 2032 Convertible Notes will mature on March 1, 2032, unless earlier repurchased, redeemed, or converted. The 2032 Convertible Notes are convertible at the option of the holders under certain circumstances. Upon conversion, we will pay or deliver, as the case may be, cash, shares of our Class A Common Stock or a combination of cash and shares of our Class A Common Stock, at our election. The net proceeds of the 2032 Convertible Notes were $446.3 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $44.5 million of the net proceeds to pay the cost of the privately negotiated capped call transactions (the “Capped Calls”). The remaining net proceeds were and are expected to continue to be used for working capital or other general corporate purposes, which may include other strategic transactions. #### Commercial Prepayments On May 23, 2024, AST LLC and Verizon entered into a Memorandum of Understanding which provides, among other things, that Verizon will make a $45.0 million commercial payment for prepaid service revenue, creditable against future service revenue of AST LLC, subject to us receiving certain regulatory approvals for our SpaceMobile Service and entry into a definitive commercial agreement. ### Cash Flows ### Historical Cash Flows The following table summarizes our sources and uses of cash for the three months ended March 31, 2025 and 2024 (in thousands): *(unaudited)* | | For the Three Months ended March 31, 2025 | 2024 | | --- | ---: | ---: | | Cash, cash equivalents and restricted cash | $874,458 | $212,440 | | Cash used in operating activities | (28,546) | (48,122) | | Cash used in investing activities | (120,456) | (39,568) | | Cash provided by financing activities | 455,865 | 212,180 | #### Operating activities Cash used in operating activities was $28.5 million for the three months ended March 31, 2025 as compared to cash used in operating activities of $48.1 million for the three months ended March 31, 2024. The $19.6 million decrease in cash used in operating activities was attributable to a decrease of $28.2 million in working capital partially offset by an increase of $8.6 million in expenses to support operations during the three months ended March 31, 2025. #### Investing activities Cash used in investing activities was $120.5 million for the three months ended March 31, 2025, as compared to cash used in investing activities of $39.6 million for the three months ended March 31, 2024. The $80.9 million increase in cash used in investing activities was attributable to an increase in purchases of property and equipment, including procurement of BB satellite materials, advance launch and BB satellite materials payments, and other capital advances. #### Financing activities Cash provided by financing activities was $455.9 million and $212.2 million during the three months ended March 31, 2025 and 2024, respectively. The $243.7 million increase in cash provided by financing activities was attributable to a $338.0 million increase in net proceeds raised from issuance of debt and a $3.1 million increase in proceeds from issuance of shares under our stock-based compensation plans, partially offset by a $52.9 million decrease in net proceeds raised from issuance of equity and a $44.5 million payment to purchase Capped Calls in connection with issuance of the 2032 Convertible Notes. ### Funding Requirements We believe our existing cash and cash equivalents on hand will be sufficient to meet our anticipated cash requirements, including current working capital needs, planned operating expenses and capital expenditures, for the next 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; - Attracting, hiring, and retaining qualified personnel; - Applicable bankruptcy court approval and closing of our proposed transaction with Ligado; and - Ability to realize the anticipated benefits of our proposed transaction with Ligado. 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. 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 rates, inflationary economic conditions and imposition of tariffs and their effects on the market conditions. If we are unable to raise additional funds through equity offerings, debt financings or commercial arrangements 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 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, 2024. ### Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of March 31, 2025. ## Market risk As filed, 1,056 characters. We are exposed to market risks in the ordinary course of our business. Our exposure to market risk has not changed materially from what we previously disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2024 other than additional interest rate risk exposure from issuing the 2032 Convertible Notes as described below: On January 27, 2025, we issued the 2032 Convertible Notes with an aggregate principal amount of $460.0 million, the full amount of which was outstanding as of March 31, 2025. We carry the 2032 Convertible Notes at face value less the unamortized debt issuance costs on our unaudited condensed consolidated balance sheets. The 2032 Convertible Notes have a fixed interest rate; therefore, we have no financial statement risk associated with changes in interest rates with respect to the 2032 Convertible Notes. The fair value of the 2032 Convertible Notes changes when the market price of our stock fluctuates or market interest rates change. ## Controls and procedures As filed, 1,476 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 March 31, 2025. 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 March 31, 2025. ### 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 Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ## Risk factors As filed, 2,542 characters. For a detailed discussion of the risks and uncertainties related to our business, please refer to the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 3, 2025. There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024, except as specified below. ***Changes in U.S. trade policy, including changes to existing trade agreements and any resulting changes in international trade relations, may have a material adverse effect on our business, prospects, financial condition or operating results.*** The recent change in the U.S.’s approach to international trade may impact existing bilateral or multi-lateral trade agreements and treaties with foreign countries. The U.S. has imposed tariffs on certain foreign goods and may increase tariffs or impose new ones, and certain foreign governments have retaliated and may continue to do so. While certain tariffs have been paused, ultimately trade policy decisions are outside of our control and may have consequences for our business, prospects, financial condition and operating results. Changes in trade policies, such as new tariffs or increases in tariffs, or reactionary measures, including retaliatory tariffs, restrictions or barriers on imports and exports, legal challenges, or currency manipulation, could adversely impact us. The implementation of these or other actions has begun to and may continue to lead to increased costs for our product components or reduce availability in our supply chain, which could impact the cost to design, develop and manufacture our satellites. Changes in U.S. trade policy have created ongoing turmoil in international trade relations, and it is unclear what future actions the U.S. government or foreign governments will or will not take with respect to tariffs or other international trade agreements and policies. Current trade negotiations may fail, which may exacerbate these risks. Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies could increase our costs, adversely impact our supply chain or otherwise have a material adverse effect on our business, prospects, financial condition or operating results. While we intend to take steps to mitigate any impacts of tariffs or other impacts resulting from changes in trade policy, our ability to do so may be limited by operational, supply chain and other constraints. Filed May 12, 2025. Source: SEC EDGAR, the filing index for accession 0000950170-25-069403. Last ingested by Listed: Oct 30, 2026, 11:10 ET. No prices; not investment advice.