10-Q – 2026-05-11 – asts-20260331.htm

Depreciation and Amortization
 
Total depreciation and amortization expense increased by $6.7 million, or 61%, to $17.6 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily attributable to higher depreciation expense associated with lab, assembly, and integration equipment.
 
Loss on Remeasurement of Warrant Liabilities
 
The fair value adjustment for Private Placement Warrants outstanding at March 31, 2026 resulted in a loss of $1.2 million for the three months ended March 31, 2026 as compared to a loss of $3.2 million for the three months ended March 31, 2025. The losses in the current period and in the prior year period were largely driven by increases in our share price which increased the fair value of warrant liabilities.
 
Interest Expense
 
Interest expense increased by $19.5 million to $24.3 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was largely due to an increase in interest expense recognized on new borrowings following March 31, 2025 that included the 2032 2.375% Convertible Notes, the 2036 2.00% Convertible Notes, the 2036 2.25% Convertible Notes, the UBS Bridge Financing Loan, and the Trinity Capital Equipment Loan, 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.
 
Interest Income
 
Interest income increased by $18.8 million to $27.0 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. 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 $100.5 million for the three months ended March 31, 2026, as compared to $0.8 million for the three months ended March 31, 2025. The approximately $99.7 million increase in other expense, net was primarily due to an approximately $89.8 million induced conversion expense related to repurchases of a portion of our 2032 4.25% Convertible Notes and 2032 2.375% Convertible Notes, a $4.9 million increase in loss from our equity method investment, a $2.5 million increase in finance charges and other borrowing related fees, and a $2.5 million increase in other charges.
 
Income Tax Expense
 
The provision for income taxes was $1.2 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively. The consolidated effective tax rate for the three months ended March 31, 2026 and March 31, 2025 was (0.47%) and (0.26)%, respectively. Refer to Note 11 Income Taxes in the accompanying notes to the unaudited condensed consolidated financial statements for further information.

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Net Loss Attributable to Noncontrolling Interest
 
Net loss attributable to noncontrolling interest was $58.6 million for the three months ended March 31, 2026 as compared to $17.9 million in the three months ended March 31, 2025. This increase in net loss attributable to noncontrolling interest was due to an increase in net loss generated at AST LLC, partially offset by a decrease in noncontrolling interest’s ownership percentage in AST LLC.

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Liquidity and Capital Resources
 
Our current sources of liquidity are cash and cash equivalents on hand. As of March 31, 2026, we had approximately $3,458.9 million of cash and cash equivalents and restricted cash on hand, including $429.3 million of restricted cash. We believe our cash and cash equivalents on hand will be sufficient to meet our current working capital needs, planned operating expenses and capital expenditures for a period of the next 12 months from the date of this Quarterly Report.

The design, assembly, integration, testing and launch of satellites and related ground infrastructure is capital intensive. We continue to 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, with initial launches higher than that range and trending down over time as we optimize payloads and related launch terms and evaluate a multitude of launch opportunities. The estimated average capital cost per Block 2 BB satellite excludes cost of certain initial satellites used to validate satellite performance and operations and 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 coverage to the most commercially attractive MNO markets. 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 additional worldwide strategic markets with approximately 90 BB satellites. We believe that we are fully funded for our costs necessary to manufacture and launch a constellation of approximately 90 BB satellites.

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.
 
Commitments
During the three months ended March 31, 2026, 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, 2025, other than issuance of the 2036 2.25% Convertible Notes, repurchase of a portion of the 2032 4.25% Convertible Notes and the 2032 2.375% Convertible Notes, and repayment of the two Prosperity loans and as described below.
As of March 31, 2026, we had contractual commitments with third parties in the aggregate amount of approximately $540.0 - $560.0 million primarily related to R&D programs, operational services, capital improvements and procurement of BB satellite components needed, in accordance with our production plan, for the assembly, integration and testing necessary to complete the planned constellation of over 90 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 agreements 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 agreements. 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. As of March 31, 2026, the minimum commitments related to future launches are approximately $200.0 - $250.0 million.
 
Spectrum Usage Rights Transaction and Related Financing
 
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 the United States Bankruptcy Code in the Bankruptcy Court.
 
On March 22, 2025, pursuant to the Strategic Collaboration Term Sheet, we, AST LLC, Spectrum USA I, LLC, a subsidiary of AST LLC (“SpectrumCo”) and Ligado entered into certain definitive agreements that, among other things, provided for (1) a $550.0 million contingent payment from us to Ligado, (2) SpectrumCo’s obligation to make spectrum access usage payments of at least $80.0 million annually (“L-band Annual Payment”) (with the option to pay the excess of the amount owed by Ligado to utilize the L-band spectrum in

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our Class A Common Stock for the first three years), and revenue share payments in exchange for the right to use up to 40 MHz of the L-band spectrum, (3) our obligation to pay a usage fee amount due in cash (plus a 30% premium with respect to each such payment payable in our Class A Common Stock or cash at our discretion) (the “Crown Castle Annual Payment”) for the right to use the up to 5 MHz of the 1670-1675 MHz Spectrum, and (4) issuance of 4,714,226 penny warrants (“Penny Warrants”) on March 22, 2025 to Ligado, which were fully exercised for shares of our Class A Common Stock at an exercise price per share equal to $0.01 per share in the first quarter of 2026.
On June 23, 2025, the Bankruptcy Court approved the transactions (the “Spectrum Usage Rights Transaction”) contemplated in the Strategic Collaboration Term Sheet. The closing of the Spectrum Usage Rights Transaction is subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions. On or about September 29, 2025, the Bankruptcy Court confirmed Ligado’s Chapter 11 plan.
Our obligation to make the L-band Annual Payment to Ligado began on June 23, 2025, and we have also commenced paying the Crown Castle Annual Payment. The total of the L-band Annual Payment and the Crown Castle Annual Payment payable by us that we have the option to pay in shares of our Class A Common Stock aggregates to approximately $85.4 million as of March 31, 2026.
Settlement Term Sheet
On June 13, 2025, we announced a Settlement Term Sheet (the “Term Sheet”) among various parties including us, Ligado, Viasat, Inc. and Inmarsat. Pursuant to the Term Sheet, as long as Ligado’s Chapter 11 plan is confirmed and as long as the financial sponsors of Ligado provide a backstop commitment to Ligado that is acceptable to us, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur (the “Backstop Commitment”), we agreed that, with respect to the $550.0 million otherwise owed to Ligado in connection with the Spectrum Usage Rights Transaction, we would pay $420.0 million to Ligado for the benefit of Inmarsat on October 31, 2025, $100.0 million to Ligado for the benefit of Inmarsat on March 31, 2026 and $15.0 million to Ligado for the benefit of Inmarsat on receipt of specified regulatory approvals and the closing of the Spectrum Usage Rights Transaction. The remaining $15.0 million would be paid to Ligado at closing. On October 31, 2025 we made the first $420.0 million payment to Ligado for the benefit of Inmarsat. On or about March 31, 2026, we made the $100.0 million payment in accordance with the Term Sheet. Per the Term Sheet, the funds were intended to be for the benefit of Inmarsat and paid over to Inmarsat. However, by order of the Bankruptcy Court dated April 2, 2026, the $100.0 million payment has been placed in escrow. Distribution of these funds following their release from escrow is subject to further order of the Bankruptcy Court. The Backstop Commitment provided by Ligado’s financial sponsors has been memorialized in an amendment to Ligado’s debtor in possession financing arrangements and has been approved by the Bankruptcy Court. The funds under the $520.0 million Backstop Commitment will be available to be drawn by Ligado only in the event the applicable regulatory approvals are not obtained in accordance with the definitive documents between us and Ligado, and is subject to the satisfaction of certain other limited conditions. The proceeds of the Backstop Commitment can only be used to refund us for the amount that we paid to Ligado for the benefit of Inmarsat prior to receipt of the applicable regulatory approvals.
Sound Point Credit Facility
To support consideration payments in connection with the Ligado Transaction, on July 15, 2025 (the “Credit Facility Closing Date”), SpectrumCo entered into a credit agreement (the “Sound Point Credit Agreement”) with Sound Point Agency LLC, as administrative agent and collateral agent, and the lenders from time to time party thereto. SpectrumCo has not yet drawn any funds under the Sound Point Credit Agreement. The Sound Point Credit Agreement provides for a non-recourse senior-secured delayed-draw term loan facility (the “Sound Point Credit Facility”) in an aggregate principal amount of $550.0 million (“Loan Amount”). The Sound Point Credit Facility will be available to SpectrumCo to draw until October 5, 2026 with an option to extend for an additional 180 days (“Availability Period”) subject to payment of an additional 1% fee on the Loan Amount. The Sound Point Credit Facility will be available to SpectrumCo upon the satisfaction of certain conditions, including, among others, (i) entry into security documents and other related documents, (ii) receipt of all required regulatory and FCC approvals relating to the Spectrum Usage Rights Transaction, (iii) confirmation and occurrence of certain bankruptcy-related events pertaining to Ligado and (iv) certain other customary conditions to funding. The Sound Point Credit Facility will be secured by substantially all of the assets of SpectrumCo and the newly formed subsidiary that will purchase and collect the receivables associated with the revenues generated from use of the L-band spectrum (“RevenueCo”). RevenueCo will also act as a guarantor under the Sound Point Credit Facility. SpectrumCo’s assets are not available to satisfy the claims of creditors of us or AST LLC. Neither we nor AST LLC will be liable as a borrower or guarantor or otherwise for any payments owing in connection with the Sound Point Credit Facility, and the lenders’ recourse to the assets of AST LLC will be limited to AST LLC’s equity interests both in SpectrumCo and in RevenueCo.
The Sound Point Credit Facility requires SpectrumCo to pay a commitment fee equal to 2% of the Loan Amount, which SpectrumCo has fully paid. The Sound Point Credit Facility also includes a ticking fee equal to 0.15% of the Loan Amount payable on a monthly basis from the Credit Facility Closing Date to the date the Sound Point Credit Facility is drawn. If SpectrumCo terminates the Sound Point Credit Facility prior to the end of the Availability Period, it will be required to pay a termination fee, payable in cash or shares of our Class A Common Stock at SpectrumCo’s option, ranging from 1% to 5% of the Loan Amount depending on when SpectrumCo terminates the Sound Point Credit Facility. The Sound Point Credit Facility also requires SpectrumCo to pay an upfront fee equal to 3% of the Loan Amount that will become payable when the Sound Point Credit Facility is drawn (and will act as a reduction to proceeds received) and some other fees that will become payable starting from the Credit Facility Closing Date. Loans drawn under the Sound Point Credit Facility will bear interest, at SpectrumCo’s option, at either (i) Term SOFR plus an applicable margin of 8.0% per annum or (ii) an alternate base rate plus an applicable margin of 9.0% per annum. The scheduled maturity date will depend on the funding date, ranging from 48 to 60 months after funding, and any prepayments made prior to 30 months after the funding date will be subject to a premium (which decreases over time).
In addition to the Sound Point Credit Agreement, which has not been drawn under, on October 31, 2025, BackstopCo entered into the UBS

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Loan Agreement with UBS AG, Stamford Branch, as lender. The UBS Loan Agreement provides for a cash collateralized UBS Loan Facility in an aggregate principal amount of $420.0 million. Refer to discussion below under “UBS Bridge Financing Loan” for further details.
No assurance can be provided that the Ligado transaction will be consummated or that the related financing will be disbursed. The Ligado transaction and the disbursement of the related financing are subject to a number of conditions, including regulatory approval. Moreover, even if the Ligado transaction is consummated, the benefits of the Ligado transaction will be subject to, among other things, integration, technology and regulatory risks. The Ligado transaction may significantly increase our indebtedness (though any debt incurred pursuant to the Sound Point Credit Facility will be non-recourse to us) and our annual required cash spend.
October 2025 Equity Distribution Agreement
On October 7, 2025, we entered into an Equity Distribution Agreement (the “October 2025 Sales Agreement” or “October 2025 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., UBS Securities LLC, William Blair & Company, L.L.C and Yorkville Securities, LLC (collectively, the “agents”) to sell shares of the Company’s Class A Common Stock having an aggregate sale price of up to $800.0 million through an “at the market offering” program under which the agents acted as sales agents. The agents were entitled to total compensation at a commission rate of up to 3.0% of the gross sales price per share sold.
Under the October 2025 Sales Agreement, we issued 874,045 shares of our Class A Common Stock during three months ended March 31, 2026 and received proceeds of $80.3 million, net of commissions paid to the agents and transaction costs. During the three months ended March 31, 2026, we paid commission of approximately $0.4 million to the agents with respect to such sales. Having utilized virtually the entire capacity of the October 2025 ATM Equity Program, we terminated the October 2025 ATM Equity Program on March 17, 2026. Proceeds from the sale of our Class A Common Stock under the October 2025 Sales Agreement were used for general corporate purposes.
Prosperity Term Loan
In December 2021, concurrent with the purchase of real property and certain equipment in Midland, Texas, AST & Science Texas, LLC (“AST Texas”) entered into a credit agreement with Lone Star State Bank of West Texas (“Lone Star”), succeeded by Prosperity Bank by merger to Lone Star, providing for a $5.0 million term loan secured by certain 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.
On March 11, 2026, we repaid the principal amount, including accrued interest aggregating to approximately $4.2 million.
Prosperity Capital Equipment Loan
On August 14, 2023, we entered into a loan agreement with Lone Star, succeeded by Prosperity Bank by merger to 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”). We drew the entire $15.0 million on September 19, 2023. The Lone Star Loan Agreement includes certain customary affirmative and negative covenants. As part of entering into the Master Equipment Financing Agreement (the “MEFA”) with Trinity Capital, Inc., we and Prosperity Bank amended the Lone Star Loan Agreement whereby Prosperity Bank released the lien on certain real property fixtures and equipment and we pledged a $15.0 million deposit in the Lone Star Bank Money Market Fund as a security for the loan. 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.
On March 11, 2026, we repaid the principal amount, including accrued interest aggregating to approximately $12.1 million.
Trinity Capital Equipment Loan
On June 27, 2025, we entered into the MEFA with Trinity Capital, Inc., as agent (the “Agent”) and lender, and the other lenders party (the “Lenders”) thereto, providing for a conditional commitment to provide financing in the total amount of up to $100.0 million. In 2025, we, the Agent and the Lenders executed four five-year Equipment Financing Schedules (“Schedules”) to the MEFA (together with the Schedules, the “Agreements”) borrowing a total of $50.5 million. The borrowings carry an aggregate monthly payment of approximately $1.1 million and an end of term payment of 9% of the drawn amounts. The Company received proceeds of approximately $49.1 million, net of debt issuance costs of approximately $0.1 million, commitment fee of approximately $0.8 million and other finance charges of approximately $0.5 million. The remaining amount of up to $49.5 million may be funded in one or more draws on or before June 30, 2027, subject to the satisfaction of various conditions.
Our obligations under the Agreements are secured by certain of our tangible assets. The MEFA contains customary affirmative and negative covenants. The MEFA also contains certain customary events of default that, if they occur, will be deemed to occur under all Schedules.

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UBS Bridge Financing Loan
On October 31, 2025, BackstopCo entered into the UBS Loan Agreement with UBS AG, Stamford Branch, as lender. The UBS Loan Agreement provides for a cash collateralized UBS Loan Facility in an aggregate principal amount of $420.0 million. The UBS Bridge Financing Loan bears interest at a floating rate equal to Term SOFR plus 2.0% per annum and matures on the earlier of (a) October 31, 2028 and (b) the date on which the UBS Loan Facility shall be terminated or accelerated as provided in the UBS Loan Agreement. The UBS Bridge Financing Loan can be prepaid in whole or in part, without penalty or premium, subject to payment of any applicable breakage costs.
The UBS Loan Facility is secured by a first-priority lien on substantially all of BackstopCo’s assets. We are not liable as a borrower or guarantor or otherwise for any payments owing in connection with the UBS Loan Facility. AST LLC will act as a limited guarantor under the UBS Loan Facility solely upon the occurrence of certain “bad boy” actions adverse to the lender by AST LLC or its affiliates, and the lender’s recourse to the assets of AST LLC is limited to AST LLC’s equity interests in BackstopCo. In addition, the affirmative and negative covenants contained in the UBS Loan Agreement (as described further below), apply to BackstopCo and/or AST LLC, as applicable.
The UBS Loan Agreement includes customary affirmative and negative covenants, including restrictions on additional indebtedness, liens, investments, asset dispositions, mergers, affiliate transactions, and dividends, as well as requirements relating to use of proceeds and compliance with specified agreements, among other covenants. Further, at all times following the UBS Loan Facility closing date until the maturity or termination of the UBS Loan Facility, BackstopCo is required to maintain cash or cash equivalents on deposit or credited to its collateral account in an amount equal to (or in excess of) 102.0% of the outstanding principal amount of the loan under the UBS Loan Facility. The UBS Loan Agreement also contains customary events of default (subject to grace periods, where applicable), including, among others, failure to pay principal or interest, cross-defaults to other agreements, breaches of representations and warranties, covenant defaults, the occurrence of a change in control and certain bankruptcy and insolvency events.
2032 4.25% Convertible Notes
On January 27, 2025, we issued $460.0 million aggregate principal amount of convertible senior notes due 2032 (the “2032 4.25% 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 net proceeds of the 2032 4.25% 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 “January 2025 Capped Calls”). The remaining net proceeds were used for working capital or other general corporate purposes. On November 4, 2025, we sold the January 2025 Capped Calls for net cash proceeds of approximately $74.5 million.
On July 3, 2025, July 31, 2025 and October 29, 2025, we completed the repurchase of $225.0 million, $135.0 million and $50.0 million, respectively, of the outstanding principal amount of the 2032 4.25% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders for an aggregate repurchase price of approximately $502.9 million, $346.9 million and $161.1 million, respectively, which included accrued and unpaid interest. The repurchase was funded with the net proceeds from a registered direct offering of 9,450,268 shares, 5,775,635 shares and 2,048,849 shares, respectively, of our Class A Common Stock to the same note holders participating in the note repurchase.
On February 20, 2026 and February 23, 2026, we completed the repurchase of approximately $46.5 million of the outstanding principal amount of the 2032 4.25% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders for an aggregate repurchase price of approximately $180.5 million. The repurchase was funded with the net proceeds from a registered direct offering of 1,862,741 shares of our Class A Common Stock to the same note holders participating in the note repurchase.
The 2032 4.25% 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 4.25% Convertible Notes will mature on March 1, 2032, unless earlier repurchased, redeemed, or converted. The 2032 4.25% 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.
2032 2.375% Convertible Notes
On July 29, 2025, we issued $575.0 million aggregate principal amount of convertible senior notes due 2032 (the “2032 2.375% Convertible Notes”), including the exercise in full of the option granted to the initial purchasers to purchase up to $75.0 million aggregate principal amount of notes. The net proceeds of the 2032 2.375% Convertible Notes were $560.0 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. We used approximately $54.0 million of the net proceeds to pay the cost of the privately negotiated capped call transactions (the “July 2025 Capped Calls”). The remaining net proceeds were used for working capital or other general corporate purposes.
On February 20, 2026 and February 23, 2026, we completed the repurchase of $250.0 million of the outstanding principal amount of the 2032 2.375% Convertible Notes in separate, privately negotiated repurchase transactions with a limited number of note holders for an aggregate repurchase price of approximately $433.7 million, which included accrued and unpaid interest. The repurchase was funded with the net proceeds from a registered direct offering of 4,475,223 shares of our Class A Common Stock to the same note holders participating in the note repurchase.

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The 2032 2.375% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.375% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on April 15, 2026. The 2032 2.375% Convertible Notes will mature on October 15, 2032, unless earlier repurchased, redeemed, or converted. The 2032 2.375% 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.
2036 2.00% Convertible Notes
In October 2025, we issued $1,150.0 million aggregate principal amount of convertible senior notes due 2036 (the “2036 2.00% Convertible Notes”), including the exercise in full of the option by the initial purchasers to purchase up to $150.0 million aggregate principal amount of the notes. The net proceeds of the 2036 2.00% Convertible Notes were $1,129.2 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. Proceeds from the issuance of the 2036 2.00% Convertible Notes are expected to be used for general corporate purposes, including without limitation funding the deployment of our worldwide constellation of satellites in anticipation of adding incremental strategic markets for our SpaceMobile Service.
The 2036 2.00% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.00% per year, payable semiannually in arrears on January 15 and July 15 of each year, beginning on July 15, 2026. The 2036 2.00% Convertible Notes will mature on January 15, 2036, unless earlier repurchased, redeemed, or converted. The 2036 2.00% 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.
2036 2.25% Convertible Notes
In February 2026, we issued $1,075.0 million aggregate principal amount of convertible senior notes due 2036 (the “2036 2.25% Convertible Notes”), including the exercise of the option by the initial purchasers to purchase an additional $75.0 million aggregate principal amount of the notes. The net proceeds of the 2036 2.25% Convertible Notes were $1,057.5 million after deducting the initial purchasers’ discounts and commissions and the estimated offering expenses payable by us. The net proceeds are expected to be used for general corporate purposes, including without limitation, accelerating the deployment of our controlled spectrum bands on a global basis, monetizing the capabilities of our proprietary technology to capture the evolving commercial opportunities related to artificial intelligence, enhancing investment in government space opportunities in the U.S., reducing higher interest debt, and pursuing opportunistic investments to accelerate our SpaceMobile Service and capabilities.
The 2036 2.25% Convertible Notes are our senior, unsecured obligations and bear interest at a fixed rate of 2.25% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2026. The 2036 2.25% Convertible Notes will mature on April 15, 2036, unless earlier repurchased or converted. The 2036 2.25% 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.
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. On October 8, 2025, we announced the signing of a definitive commercial agreement with Verizon. On April 22, 2026, we received certain regulatory approvals for our SpaceMobile Service. As of the date of this Quarterly Report, the $45.0 million commercial payment is due from Verizon.
Cash Flows

Historical Cash Flows

The following table summarizes our sources and uses of cash for the three months ended March 31, 2026 and 2025 (in thousands):
 

 

For the Three Months ended
March 31,

 

 

(unaudited)

 

 

2026

 

 

2025

 

Cash, cash equivalents and restricted cash

$

3,458,864

 

 

$

874,458

 

Cash used in operating activities

 

(48,058

)

 

 

(28,546

)

Cash used in investing activities

 

(379,263

)

 

 

(120,456

)

Cash provided by financing activities

 

1,105,334

 

 

 

455,865

 

 

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Operating activities
 
Cash used in operating activities was $48.1 million for the three months ended March 31, 2026 as compared to cash used in operating activities of $28.5 million for the three months ended March 31, 2025. The $19.6 million increase in cash used in operating activities was attributable to an increase of $34.5 million in cash expenses to support operations, partially offset by a decrease of $14.9 million in working capital during the three months ended March 31, 2026.

Investing activities
 
Cash used in investing activities was $379.3 million for the three months ended March 31, 2026, as compared to cash used in investing activities of $120.5 million for the three months ended March 31, 2025. The $258.8 million increase in cash used in investing activities was attributable to an increase of $141.2 million in purchases of property and equipment, including procurement of BB satellite materials, advance payments made under launch contracts, advance payments made to procure BB satellite materials and other capital advances, a $100.0 million advance payment made in the Spectrum Usage Rights Transaction pursuant to the Term Sheet during the three months ended March 31, 2026, and $17.6 million consisting of the L-band Annual Payment, a revenue share payment, and the Crown Castle Annual Payment made during the three months ended March 31, 2026.

Financing activities
 
Cash provided by financing activities was $1,105.3 million and $455.9 million during the three months ended March 31, 2026 and 2025, respectively. The $649.4 million increase in cash provided by financing activities was attributable to an increase of $614.7 million in net proceeds from the issuance of debt, an increase of $639.7 million in net proceeds from issuance of equity, and a decrease of $44.5 million that was used in purchases of capped calls during the three months ended March 31, 2025. The increase was partially offset by an increase of $629.1 million in repayments of debt and an increase of $20.4 million used to settle equity awards under our stock-based compensation plans.

Funding Requirements
 
We believe our existing cash and cash equivalents as of March 31, 2026 will be sufficient to meet anticipated cash requirements 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 regulatory approval and closing of our proposed transaction with Ligado and related financing; 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 geopolitical events, higher interest rates and inflationary economic conditions and their effects on the

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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, 2025. There have been no material changes to our critical accounting policies since our Annual Report on Form 10-K for the year ended December 31, 2025.
 
Off-Balance Sheet Arrangements

On June 13, 2025, we announced the Term Sheet among various parties including us, Ligado, Viasat, Inc. and Inmarsat. Pursuant to the Term Sheet, as long as the financial sponsors of Ligado provide the Backstop Commitment to Ligado that is acceptable to us, in support of a full refund of payments by Ligado in the event applicable regulatory approvals are not obtained and the closing does not occur, we have agreed that, with respect to the $550.0 million otherwise owed to Ligado in connection with the Spectrum Usage Rights Transaction, we would pay $420.0 million to Ligado for the benefit of Inmarsat on October 31, 2025, $100.0 million to Ligado for the benefit of Inmarsat on March 31, 2026 and $15.0 million to Ligado for the benefit of Inmarsat on receipt of specified regulatory approvals and the closing of the Spectrum Usage Rights Transaction. The remaining $15.0 million would be payable to Ligado at the closing. On October 31, 2025, we made the first $420.0 million payment to Ligado for the benefit of Inmarsat. On or about March 31, 2026, we made the $100.0 million payment in accordance with the Term Sheet. Per the Term Sheet, the funds were intended to be for the benefit of Inmarsat and paid over to Inmarsat. However, by order of the Bankruptcy Court dated April 2, 2026, the $100.0 million payment has been placed in escrow. Distribution of these funds following their release from escrow is subject to further order of the Bankruptcy Court. As of the date of this Quarterly Report, the remaining payments under the Term Sheet constitute an off-balance sheet commitment, as the related payment obligations have not been made or are subject to closing of the Spectrum Usage Rights Transaction and, therefore, are not recognized in our unaudited condensed consolidated financial statements.

On June 23, 2025, the Bankruptcy Court approved the Spectrum Usage Rights Transaction contemplated in the Strategic Collaboration Term Sheet. On or about September 29, 2025, the Bankruptcy Court confirmed Ligado’s Chapter 11 plan. The closing of the Spectrum Usage Rights Transaction is still subject to receipt of satisfactory regulatory approvals required for the proposed use of the spectrum, as well as other closing conditions. AST LLC’s obligation to make the Crown Castle Annual Payment and SpectrumCo’s obligation to make the L-band Annual Payment each began on June 23, 2025. Refer to discussion under “Spectrum Usage Rights Transaction and Related Financing” in the “Liquidity and Capital Resources” section and Note 13 Spectrum Usage Rights and Related Financing for further details.

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Item 3. Quantitative and Qu alitative Disclosures About Market Risk
 
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, 2025 other than additional interest rate risk exposure from issuing the 2036 2.25% Convertible Notes as described below:
 
On February 17, 2026, we issued the 2036 2.25% Convertible Notes with an aggregate principal amount of $1,075.0 million, the full amount of which was outstanding as of March 31, 2026. We carry the 2036 2.25% Convertible Notes at face value less the unamortized debt issuance costs on our unaudited condensed consolidated balance sheets. The 2036 2.25% Convertible Notes have a fixed interest rate; therefore, we have no financial statement risk associated with changes in interest rates with respect to the 2036 2.25% Convertible Notes. The fair value of the 2036 2.25% Convertible Notes changes when the market price of our stock fluctuates or market interest rates change.

Item 4. Contro ls and Procedures

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, 2026. 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, 2026.

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.

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PART II - OTHE R INFORMATION

Item 1. Legal Proceedings.
 
We are subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully adjudicated. In the opinion of management, there was not at least a reasonable possibility we may have incurred a material loss, or a material loss in excess of any recorded accrual, with respect to loss contingencies. However, the outcome of litigation is inherently uncertain. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against us in a reporting period for amounts in excess of management’s expectations, our consolidated financial statements for that reporting period could be materially adversely affected. Refer to Note 8 Commitments and Contingencies in the accompanying notes to the unaudited condensed consolidated financial statements for further information.
 
Item 1A. Ri sk Factors.
 
As of March 31, 2026, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A. Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2025.
 
Item 2. Unregistered Sales of E quity Securities and Use of Proceeds.

On April 10, 2026, the Company sold 61,987 shares of its Class A Common Stock in a subscription agreement to Telus Communications Holdings (U.S.) Inc. at approximately $80.66 per share for an approximate dollar value of $4,999,985. The foregoing shares were issued in a transaction not involving a public offering in reliance upon the exemption from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The purchaser had access to information about the Company and represented that it acquired the shares for its own account and not for the purpose of distribution. The certificate for the shares contains a restrictive legend advising that the shares may not be offered for sale, sold, or otherwise transferred without having first been registered under the Securities Act or pursuant to an exemption from the Securities Act.

Item 3. Defaults U pon Senior Securities.
 
None.

Item 4. Mine S afety Disclosures.
 
Not Applicable.

Item 5. Othe r Information.
 
In the quarter ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a plan for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or a non-Rule 10b5-1 trading arrangement for the purchase or sale of our securities, within the meaning of Item 408 of Regulation S-K.

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Item 6. Exhibits
 
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

4.1

 

Indenture, dated as of February 17, 2026, by and between AST SpaceMobile, Inc. and U.S. Bank Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 17, 2026).

4.2

 

Form of Global Note, representing AST SpaceMobile, Inc.’s 2.25% Convertible Senior Notes due 2036 (included as Exhibit A to the Indenture filed as Exhibit 4.1) (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed with the SEC on February 17, 2026).

31.1*

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document

101.CAL

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.DEF

 

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

 

Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 
* Filed herewith

42

 

SIGNAT URES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

AST SPACEMOBILE, INC.

Date: May 11, 2026

By:

/s/ Abel Avellan

Name:

Abel Avellan

Title:

Chairman and Chief Executive Officer

Principal Executive Officer

Date: May 11, 2026

By:

/s/ Andrew M. Johnson

Name:

Andrew M. Johnson

Title:

Chief Financial Officer and Chief Legal Officer

Principal Financial Officer

 
 

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