Q2 2024 AST SpaceMobile Inc Earnings Call

[music].

Operator: Good day and thank you for standing by. Welcome to the AST SpaceMobile first quarter 2024, business update call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to you. Scott Wisniewski, Chief Strategy Officer of AST SpaceMobile, please go ahead. Thank you and good afternoon everyone.

Good day, and thank you for standing by welcome to the <unk> space Mobile first quarter 2024.

Business update call. Please be advised that today's conference is being recorded I would now like to hand, the conference what would you hope to see Scott.

Scott: Chief strategy officer of AAC seasonal. Please go ahead.

Scott Wisniewski: Let me refer you to slide two of the presentation, which contains our Safe Harbor disclaimer. During today's call, we may make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainty. Many factors can cause actual events to differ materially from the forward-looking statements on this call.

Scott: Thank you and good afternoon, everyone. Let me refer you to slide two of the presentation, which contains our safe Harbor disclaimer. During today's call. We may make certain forward looking statements. These statements are based on current expectations and assumptions and as a result are subject to risks and uncertainties. Many.

Scott Wisniewski: For more information about these risks and uncertainties, please refer to the risk factors section of AST SpaceMobile's annual report on 10K for the year that ended December 31st, 2023, with the Securities and Exchange Commission and other documents filed by AST SpaceMobile at the SEC from time to time. Also, after our initial remarks, we will begin the Q&A section with questions submitted by our shareholders. Welcome, everyone.

Scott: Many factors could cause actual events to differ materially from the forward looking statements on this call.

Scott: For more information about these risks and uncertainties. Please refer to the risk factors section of <unk> annual report on 10-K for the year that ended December 31, 2023, with the Securities and Exchange Commission and other documents filed by ASC space mobile with the SEC from time to time.

Scott: Also after our initial remarks, we will begin the.

Speaker Change: The Q&A section was question submitted by our shareholders.

Scott Wisniewski: For those of you who may be new to our company and mission, there are over 5 billion mobile phones in use today around the world, but many of us still experience gaps in coverage as we live, work and travel. There are also still billions of people without cellular broadband and who remain unconnected to the global economy. The markets we are pursuing are massive, and the problem we are solving is important and touches nearly all of us.

Speaker Change: Welcome everyone for those of you who may be new to our company mission. There are over 5 billion mobile phones in use today around the world, but many of us still experienced gaps in coverage as we live work and travel.

Speaker Change: There are also still billions of people without cellular broadband and who remain unconnected to the global economy.

Speaker Change: The markets, we are pursuing a massive and the problem. We are solving is important and touches nearly all of us.

Scott Wisniewski: In this backdrop, AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with everyday mobile phones, supported by our extensive IP and patent portfolio. It is now my pleasure to pass it over to Chairman and CEO, Abel Avellan. Thank you, Scott. Good day to everyone.

Speaker Change: In this backdrop ASC space model is building the first and only global cellular broadband network and space to operate directly with everyday mobile phones supported by our extensive IP and patent portfolio.

Speaker Change: It is now my pleasure to pass it over to chairman and CEO Bill Avalon.

Bill Avalon: Thank you Scott Good day to everyone will go the past few years has culminated in appeals to Mendoza, David you're an assignment for Acs baseball.

Scott Wisniewski: The hard work of the past few years is culminating in a period of tremendous activity and excitement for AST SpaceMobile. We have moved past a primary focus on improving our technology and funding our growth into the next phase of executing our vision and operationalizing our business. We are shifting from R&D to full-scale production and commercialization of our pest-based cellular broadband.

Speaker Change: We have moved past the primary focus on improving our technology.

Speaker Change: Our growth into the next phase of executing our vision and operationalized an hour basis.

Speaker Change: We are shifting from R&D to full scale production and commercialization of our faith based Tailorable button.

Abel Avellan: We're funded to achieve our near-term goals and reach initial revenue. Our business is now accelerating. Just last week, our first five commercial satellites, called the Bluebirds, arrived in Cape Canaveral, Florida, after completing final assembly at our manufacturing facilities in Texas. The satellites are now undergoing final preparation for integration with the Falcon 9 launch vehicle for a dedicated mission.

Speaker Change: Our technology has proven patented and validated our commercial ecosystem is in place and growing we're funded to achieve our near term goals and reach initial revenue or business has now accelerated.

Speaker Change: Just last week, our first cycle merchant side like Cola Bluebirds arrived in Cape Canaveral, Florida. After completing final assembly at our manufacturing facilities in Texas.

Speaker Change: Satellites are now undergoing final preparation for integration with Falcon nine launch vehicle for.

Speaker Change: For a dedicated mission.

Abel Avellan: We have a seven-day contracted orbital launch window in the first half of September. Our current expectation is that we will launch in the first half of September. But this is ultimately based on a variety of factors outside our control, including weather conditions.

Speaker Change: We have seven de contracted or we didn't launch window in the first half of September our current expectation is that we will launch in the first half will sit them.

Speaker Change: So this is ultimately based on a variety of factors outside our control, including the weather conditions.

Abel Avellan: As the target date is finalized, we will communicate this with the public. To put our first commercial satellite into orbit really is a culmination of significant progress to this day. I am incredibly proud of our team.

Speaker Change: And the target date is finalized we will communicate these with the board.

To put our first commercial satellites into orbit really is a culmination of significant progress to date.

Speaker Change: I am incredibly proud of our team we have spent over seven years and over $1 billion investment dollars to get to this point along the way generating over 3400 patents and patent pending changed completely in the assembly testing and other logistics to ensure that our blue bar, we're ready to transport to Florida, our red.

Abel Avellan: We have spent over seven years and over $1 billion in investment dollars to get to this point, along the way generating over 3,400 patent and patent-pending trains, completing the assembly, testing, and other logistics to ensure that our Bluebirds were ready to transport to Florida and were ready to launch. It's a major milestone for our company and mission. These Bluebirds will each be the largest communications array ever to be deployed commercially into low-Earth orbit.

Speaker Change: D to launch is a major milestone for our company on mission.

Speaker Change: These blue birds will each be the largest communications array able to be deployed commercially into low debt.

Abel Avellan: These arrays provide a strong signal that can reach standard smartphones directly to provide cellular broadband service and other non-communication government applications, with these initial commercial satellites who are targeting nearly 100% geographical coverage for the continental United States using premium 850 megahertz low band spectrum, which offers superior signal penetration in the low band spectrum range. Low band frequencies travel longer distances and penetrate deeper into buildings and through foliage, compared to higher frequencies.

Speaker Change: These are ready to roll out a strong signal that can reach standard smartphone directly to provide cellular broadband service and other noncore communication government applications with these initial commercial satellites, we're targeting nearly 100% geographical coverage for the continental United States using premium 850 Mega.

Speaker Change: Lola spectrum, which offer superior signal penetration in the low lying to stay tuned range, northern frequency travel longer distances and penetrate deeper into buildings and through foliage compared to higher frequencies.

Abel Avellan: These first five satellites will provide non-continuous cellular broadband service nationwide across the United States. After a few months of in-orbit service activation, this initial service for AT&T and Verizon beta test users will start with 5,600 cells across the country. This program was made possible in large part due to the continued and growing support of our strategic partners. During the second quarter, we secured another major strategic financing partner and customer, adding Verizon to a top-tier group that also includes AT&T, Vodafone, Google, American Tower, Rakuten, Bell Canada, and others.

Andres Ituarte: Andres Ituarte, Andrew Johnson, James Ratzer, Michael Crawford, Michael Crawford[inaudible] Good day, and thank you for standing by. Welcome to the AST SpaceMobile First Quarter 2024 Business Update call. Please be advised that today's conference is being recorded.

Speaker Change: First <unk> suddenly we provide non continuous cellular broadband service nationwide outgrowth in the United States. After a few months of in orbit service activation. This initial service for AT&T and Verizon Beta Houston will start with 5000 seats onto our sales across the country.

Speaker Change: This program was made possible in large part due to the continue and growing support of our strategic partners. During the second quarter, we secured another major strategic financing partner and customer.

Speaker Change: Horizon to adult tier group that also include AT&T boarder phone, Google American Tower, Tobacco, 10, Bell, Canada and others. These hold 2 million commitment from Verizon, including $55 million of commercial prepayments on 35 million convertible notes just a few months after strategic financing.

Abel Avellan: This $100 million commitment from Verizon includes $65 million of commercial prepayments and $35 million of convertible notes just a few months after strategic financing with AT&T, Google, and Vodafone, is another powerful validation of our technology and our business model. This investment policy follows the Definitive and Commercial Agreement announced with AT&T in May.

Scott Wisniewski: I would not like to hand the conference over to you, of course today, Scott Wisniewski, Chief Strategy Officer of AST SpaceMobile. Please go ahead. Thank you, and good afternoon, everyone. Let me refer you to slide two of the presentation, which contains our safe Harvard disclaimer. During today's call, we may make certain forward looking statements. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties.

Speaker Change: With AT&T rule are more of the phone.

Speaker Change: Is another powerful validation of our technology and our business model.

Speaker Change: These investments closely follow the definitive a new commercial agreement announced with AT&T in me.

Abel Avellan: Bringing on board two major U.S. mobile operators in the most valuable wireless market in the world was a transformational commercial milestone for us. During the last few months, we shifted our manufacturing focus to increase Block II production, incorporating the lessons learned from manufacturing of the first five commercial satellites. We are continuing planning an initial production for the first 17 Block II satellites to be built in phases within the initial launch in Q1 of 2025.

Speaker Change: Bring it on board to major U S mobile operators and the more valuable wireless market in the world was a transformation transformational commercial milestone for us.

Scott Wisniewski: Many factors can cause actual events to differ materially from the forward looking statements on this call. For more information about these risks and uncertainties, please refer to the risk factor section of AST SpaceMobile's annual report on 10K for the year that ended December 31, 2023, with the Securities and Exchange Commission and other documents filed by AST SpaceMobile, the SEC from time to time. Also, after our initial remarks, we will begin the Q&A section with questions submitted by our shareholders.

Speaker Change: During the last few months, we shifted our manufacturing focused to increase block two production incorporate any lesson learned for manufacturing over the first five commercial satellites will continue planning and initial production for the first 17 look to subtly two rebuilt and faces when Indonesia launch in Q1 of 2025.

Abel Avellan: These satellites, when equipped with our ASIC, will be approximately 2400 square feet in size, and are expected to support up to 10-fold improvement of processing bandwidth per satellite compared to Block 1 satellite that we are launching this September. We expect to start using our ASIC on our sixth Block 2 satellite, and we can use existing FPGA configuration for as long as it's required. Alongside this activity, we have not lost sight of our technology roadmap. We can now report that we have completed the ASIC chip takeout with the SNC.

Speaker Change: These satellites when equipped with our <unk> will be approximately 2400 square feet in size and are expected to support up to 10 full improvement of processing bandwidth per satellite compared to blow one satellite that we are launching this September we expect to start using our ASIC on our six blocks.

Scott Wisniewski: Welcome, everyone. For those of you who may be new to our company and mission, there are over 5 billion mobile phones in use today around the world, but many of us still experience gaps and coverages we live, work, and travel. There are also still billions of people without cellular broadband and who remain unconnected with the global economy. The markets we are pursuing are massive and the problem we are solving is important and touches nearly all of us. In this backdrop, AST SpaceMobile is building the first and only global cellular broadband network in space to operate directly with everyday mobile phones, supported by our extensive IP impact and portfolio.

Speaker Change: Two satellite and we can use existing SBA configuration for Offloading as required.

Speaker Change: I'll now alongside of this activity, we had no loss side or both.

Speaker Change: Our technology roadmap, we can now report that we have completed the ASIC chip tape out with TSMC is technology is the cornerstone of our Bluebird block two program.

Abel Avellan: This technology is the cornerstone of our Bluebird Block II program. The FT5000-ASIC is a novel, custom, low-power architecture developed to enable up to a 10-fold improvement in processing bandwidth on each satellite, unlocking opportunities for seamless space-based cellular broadband services worldwide. With the 3 bits per hertz that we have demonstrated using Blue Ochre 3 and our planned and commercial satellite capacity of up to 40 megahertz per beam, this translates into performance of up to 120 megabits, peak data rates.

Speaker Change: <unk> 5000, <unk> is a novel coastal low power architecture developed enabled up to a 10 fold improvement in processing bandwidth on each satellite when local opportunity for seamless space based cellular bromont services more way.

Abel Avellan: It is now my pleasure to pass it over to Chairman and CEO of El Pavelon. Thank you, Scott. Good day to everyone.

Abel Avellan: The hard work of the past few years is culminating in a period of tremendous activity and excitement for AST SpaceMobile. We have moved past a primary focus on proving our technology on time funding our growth into the next phase of executing our vision and operationalizing our business. We are shifting from R&D to full-scale production and commercialization of our base-based cellular broadband. Network. Our technology is proven, patented and validated. Our commercial ecosystem is in place and growing.

Speaker Change: With the three EBIT for her that we have demonstrated use them little volcker three on our plan and commercial satellite capacity of up to 40 megahertz per beam business.

Speaker Change: The performance of up 220 megabit.

Abel Avellan: The completion of the tape out is a milestone that marks the culmination of five years of dedicated research, development, and engineering expertise with approximately 45 million of developers. In summary, we want to change the world. We're seeking to connect the billions of people who are not connected. Improving Public Safety, Enabling Global Commerce. And for the average user, who can see fewer drop calls, frustrating dead zones, and missing connections.

Speaker Change: Big data rates the completion of the tape out is a milestone that marks the culmination of five years of dedicated research development and engineering expertise with approximately $45 million all develop.

Speaker Change: In summary, we wanted to change the world, we're seeking to connect billions of people who are not connected improving public safety, enabling global commerce.

Abel Avellan: We are funded to achieve our near-term goals and reach initial revenue. Our business is now accelerated. Just last week, our first five commercial satellites called Bluvers arrived in Cape Canaveral, Florida, after completing final assembly at our manufacturing facilities in Texas. These satellites are now undergoing final preparation for integration with Falcon 9 launch vehicle for a dedicated mission. We have seven-day contracted orbital launch window in the first half of September. Our current expectation is that we will launch in the first half of September. So this is an ultimately based on a variety of factors outside our control, including the weather conditions. As the target day is finalized, we will communicate this with the public.

Speaker Change: For the average user who can see fewer dropped calls through trading dead zones and metering connections they have not been easy.

Scott Wisniewski: This has not been easy, and we entered a new phase for our company. I am deeply proud of the team we have assembled and confident in the plan ahead of us. I will now pass to Scott to provide more details on our commercial and regulatory process. Thank you, Abel.

Speaker Change: Enter a new phase for our company and deeply proud of the team we have assembled and the Gulf.

Speaker Change: Im confident in the plan ahead of us.

Speaker Change: I would now pass this call to provide more details on our commercial and regulatory process. Thank you about.

Scott Wisniewski: As we accelerate the commercialization of our network, I wanted to spend a few moments to go through the commercial and regulatory progress during the quarter, including some early wins for the first five commercial satellites. Earlier this month, we received an initial license for space-based operations in the U.S. from the FCC. This initial license authorizes AST SpaceMobile to operate using V, F, and UHF frequencies to support our gateway, feeder link, and telemetry tracking control operations for the first five commercial Bluebird satellites.

Speaker Change: As we accelerate the commercialization of our network I wanted to spend a few moments to go through the commercial and regulatory progress during the quarter, including some early wins for the first five commercial satellites.

Speaker Change: Earlier. This month, we received an initial license first space based operations in the U S from the SEC.

Abel Avellan: To put our first commercial satellite into orbit, really is a culmination of significant progress to the day. I am incredibly proud of our team. We have spent over seven years and over one billion investment dollars to get to this point. Along the way, generating over 3,400 patent and patent pending trains, completing the assembly, testing and other logistics to ensure that our Bluvers were ready to transport to Florida and were ready to launch.

Speaker Change: This initial license authorizes the ASC space mobile operators, using the apps and UHF frequencies to support our gateway feeder link and telemetry tracking and control operations for the first five commercial Bluebird satellites.

Scott Wisniewski: This license will serve as our primary license for operations in the U.S. over the life of the constellation so it's a big deal for the company and our commercialization. Both in the U.S. and at the Blueprint Global. Going forward, we continue to work with the FCC as well as our partners AT&T and Verizon to apply for upgraded modifications to this license to facilitate full-scale commercial operations on wireless frequencies, and to expand the license to support our operations over time.

Speaker Change: This license will serve as our primary license for operations in the U S over the life of the constellation. So it was a big deal for the company and our commercialization both in the U S and as a blueprint globally.

Abel Avellan: It's a major milestone for our company and mission. These Bluvers will each be the largest communications array ever to be deployed commercially into loaded orbit. This array provides tracing that can reach standard smartphone directly to provide cellular broadband service and other non-communication government applications. With this initial commercial satellite, we are targeting nearly 100% geographical coverage for the continental United States using premium 850 megahertz low-band spectrum, which offers superior signal penetration in the low-band spectrum range.

Speaker Change: Going forward, we continue to work with the FCC as well as our partners AT&T and Verizon to apply for upgrades and modifications to this license to facilitate full scale commercial operations on wireless frequencies and to expand the license to support our operations over time.

Scott Wisniewski: This FCC authorization followed the March 2024 update of our Constellation filings with the International Telecommunication Union and related filings with the FCC that placed our planned commercial satellites under the jurisdiction of the United States. This initiative represented a closer strategic alignment of our network build-out and future network operations with the United States and is a key piece of our overall regulatory strategy. In addition to the progress Abel reported with AT&T and Verizon, we continue to believe our patented technology, including our large phased array antenna technology in space, creates significant opportunities for new mission critical capabilities in the government.

Speaker Change: This FCC authorization, followed the March 2024 update of our constellation filings with the international Telecommunication Union and related filings with the FCC that placed our planned commercial satellites under the jurisdiction of the United States. This initiatives represented closer strategic alignment of our network Buildout and future network operate.

Abel Avellan: Low-band frequency travel in longer distances and penetrate deeper into buildings and through foliage compared to higher frequencies. This first fighter that we provide non-continue cellular broadband service nationwide across the United States. After a few months of in-orbit service activation, this initial service for AT&T and Verizon, better than usually will start with 5,600 across the country. This program was made possible in large part due to the continue and growing support of our strategic partners.

Speaker Change: <unk> with the United States and is a key piece of our overall regulatory strategy.

Speaker Change: Yeah.

Speaker Change: In addition to the progress of Bel reported with AT&T and Verizon We continue to believe our patented technology, including our large phase III antenna technology and space creates significant opportunities for new mission critical capabilities and the government sector.

Scott Wisniewski: We are moving forward with these dual use capabilities on our constellation and expect to generate revenue from both commercial and government applications. With this in fact, earlier this year we announced that AST SpaceMobile had been awarded a new contract through a prime contractor working with the United States government. This initial phase contract, which covers the use of Blue Walker 3, as well as the first five commercial satellites, is well underway, and during the second quarter, we completed successful in-orbit and ground tests, resulting in completed contractual milestones and top line reps.

Speaker Change: We are moving forward with these dual use capabilities on our constellation and expect to generate revenue from both commercial and government applications.

Speaker Change: It's in fact earlier this year, we announced that <unk> mobile had been awarded a new contract.

Abel Avellan: During the second quarter, we secure another major strategic financing partner and customer, adding Verizon to a top tier group that also include AT&T, both a phone, Google, American Tower, Rakuten, Belkana and others. This 100 million commitment from Verizon, including 65 million of commercial prepayments and 35 million convertible nodes. Just a few months after the strategic financing with AT&T, Google and both a phone. It's another powerful validation of our technology and our business model. This investment cost it followed the definitive agricultural agreement announced with AT&T in May.

Speaker Change: Prime contractor working with the United States government.

Speaker Change: This initial phase contract, which covers the use of Blue Walker III as well as the first five commercial satellites is well underway and during the second quarter. We completed successful in orbit can ground tests, resulting in completed contractual milestones and top line revenue.

Speaker Change: Okay.

Scott Wisniewski: This government sector strategy continues to show additional early signs of strength with two new U.S. government contract awards in recent months to one of our prime contractors. Like the February contract, these awards represent relatively small revenue by themselves, but seek to evaluate potential for full-scale, multi-year contracted services in the future.

Speaker Change: This government sector strategy continues to show additional early signs of strength with two new U S government contract awards in recent months to one of our prime contractors.

Speaker Change: Like the February contract. These awards represent relatively small revenue by themselves, but seek to evaluate potential for full scale multi year contracted services in the future.

Abel Avellan: Bring it on board two major US mobile operators in the most valuable wireless market in the world, what's a transformational, transformational commercial milestone for us. During the last few months, we shifted our manufacturing focus to increase block two production, incorporating the lesson learned from manufacturing of the first five commercial satellites. We are continuing planning an initial production for the first 17 block two satellites to be built in phases within the initial launch in Q1 2025.

Speaker Change: As customary contracts for these two new opportunities are still being finalized and we will provide detail if and when it becomes available.

Scott Wisniewski: Now this customary contracts for these two new opportunities are still being finalized and we will provide detail if and when it becomes available. Our primary commercialization strategy is to position for significant revenue opportunities as we scale the constellation, but this initial progress is encouraging, and we believe the progress represents an upgraded outlook for additional and larger signed contract awards over time. With that, I will now pass it to Andy Johnson, our new Chief Financial Officer, to take you through the financial update. Thanks, Scott, and good afternoon, everyone.

Speaker Change: And our primary commercialization strategy is to position for significant revenue opportunities as we scale the constellation.

Speaker Change: Initial progress is encouraging and we believe the progress represents an upgraded outlook for additional and larger signed contract awards overtime.

Andy Johnson: With that I will now pass it to Andy Johnson, our new Chief Financial Officer to take you through the financial update.

Abel Avellan: These satellites, when equipped with our AST, will be approximately 2,400 square feet in size and are expected to support up to 10 full improvement of processing bandwidth per satellite compared to block one satellite that we are launching this September. We expect to start using our AST on our sixth block two satellites, and we can use existing EPA configuration for our loan and this require. Alongside this activity, we had no lost sight of our technology roadmap.

Andy Johnson: I joined AST this past May because I believe wholeheartedly in the company's mission to close the digital divide by connecting the unconnected, and was convinced that this was a once-in-a-lifetime opportunity after visiting the manufacturing facilities in Midland, Texas. There I saw firsthand the sophistication of the company's technology, and most importantly, the incredible commitment of our team, led by Abel, in producing the world's first space-based cellular broadband service satellite. This is a seminal moment in the history of AST SpaceMobile and I want to personally thank all of my teammates for their dedication to our mission and delivering our first five commercial Bluebird Satellites for launch in just a few short weeks. I also want to thank Sean Wallace, our former CFO, who continues to consult for us, for his leadership, service to the company, and partnership in making my transition seamless.

Andy Johnson: Thanks, Scott and good afternoon, everyone.

Andy Johnson: Joined ISG this pathway because I believe wholeheartedly in the Companys mission to close the digital divide by connecting the unconnected.

Andy Johnson: And was convinced that this was a once in a lifetime opportunity after visiting the manufacturing facilities in Midland, Texas.

Andy Johnson: There I saw firsthand the sophistication of the Companys technology and most importantly, the incredible commitment of our team led by Adele and producing the world's first space based cellular broadband service satellites.

Abel Avellan: We can now report that we have completed the AST chip tap out with the S&C. This technology is the cornerstone of our Bloomberg block two programs. The AST 5000 AST is a novel cost-on-low power architecture developed to enable up to 10 full improvement in processing bandwidth on each satellite. A local opportunity for seamless space-based cellular broadband services worldwide. With the three-bit per herd that we have demonstrated using blue walker three and our planning commercial satellite capacity of up to 40 megahertz per beam, we translate into performance of up to 120 megahertz peak data rates.

Speaker Change: This is a seminal moment in the history of Asps space mobile and I want to personally. Thank all of my teammates for their dedication to our mission and delivering our first five commercial bluebird satellites for launch in just a few short weeks.

Speaker Change: I also want to thank Sean Wallis, our former CFO, who continues to consult for us for his leadership and service to the company and partnership and making my transition seamless.

Andy Johnson: It's a fantastic time to be a part of the AST SpaceMobile ecosystem, which includes our shareholders, our talented employees across the globe, and our mobile network operator partners. We are at the forefront of our commercial constellation deployment and I deeply appreciate those of you who are on this life changing journey with us. Let's review the key operating metrics for the second quarter that are displayed on slide 10. On the first chart, we see for the second quarter of 2024, we had non-gap, adjusted cash operating expenses of $34.6 million versus $31.1 million in the first quarter. Non-Gap Adjusted Operating Expenses excludes certain non-cash operating costs, including depreciation and amortization and stock-based compensate.

Speaker Change: It's a fantastic time to be a part of the ASC space mobile ecosystem, which includes our shareholders our talented employees across the globe and our mobile network. Operator partners. We are at the forefront of our commercial constellation deployment and I deeply appreciate those of you who are on this life changing journey with us.

Abel Avellan: The completion of the tap out is a milestone that marked the culmination of five years of dedicated research, development and engineering expertise with a process of 45 million all developed.

Abel Avellan: In summary, we want to change the world. We're seeking to connect the billions of people who are not connected, improving public safety, enabling global commerce. And for the other user who can see fewer drop calls through trading that zones and meeting connections. They have not been easy.

Speaker Change: Let's review the key operating metrics for the second quarter that are displayed on slide 10 on.

Speaker Change: On the first chart, we see for the second quarter of 2024, we had non-GAAP adjusted cash operating expenses of $34 6 million versus $31 1 million in the first quarter.

Abel Avellan: We enter a new phase for our company. And deeply proud of the team. We had assembled and confident and confident in the plan ahead of us.

Speaker Change: non-GAAP adjusted operating expenses exclude certain noncash operating costs, including depreciation and amortization and stock based compensation.

Scott Wisniewski: I would not ask to Scott to provide more details on our commercial and regulatory process. Thank you, Bill.

Andy Johnson: These expenses are up slightly from the first quarter due to final block one expenses as we neared the finish line of producing five of the largest satellites ever to be deployed in low-earth orbit, including required travel expenses to the production site in Texas, expedited hiring of engineering talent and connection with our block two mechanical work as we ramp up production of our next satellites, and the impact of an approximately 1 million one-time G&A expense reversal and Q1 that affects the quarter over quarter of comparison. Turning towards the second chart on this page, our capital expenditures for the second quarter were $21.2 million versus $26.6 million for the first quarter.

Speaker Change: These expenses are up slightly from the first quarter due to final block one expenses as we neared the finish line producing five of the largest satellites ever to be deployed in low earth orbit, including required travel expenses to the production site in Texas expedited hiring of engineering talent in connection with.

Scott Wisniewski: As we accelerate the commercialization of our network, I wanted to spend a few moments to go through the commercial and regulatory progress during the quarter, including some early wins for the first five commercial satellites. Earlier this month, we received an initial license for space-based operations in the US from the FCC. This initial license authorizes AFT Space Mobile to operate using VF and UHF frequencies to support our gateway, feeder link, and telemetry tracking control operations for the first five commercial Bluebird satellites.

Scott Wisniewski: This license will serve as our primary license for operations in the US over the life of the constellation, so it is a big deal for the company and our commercialization, both in the US and at the Blueprint globally. Going forward, we continue to work with the FCC as well as our partners AT&T and Verizon to apply for upgraded modifications to this license to facilitate full-scale commercial operations on wireless frequencies and to expand the license to support our operations over time.

Our block two mechanical work as we ramp up production of our next satellites and the impact of an approximately $1 million onetime G&A expense reversal in Q1 that affects the quarter over quarter comparison.

Speaker Change: Turning towards the second chart on this page our capital expenditures for the second quarter were $21 2 million versus $26 6 million for the first quarter. The figure was made up of capitalized direct materials and labor for block, one and block two satellites and additional facility and production equipment.

Andy Johnson: The figure was made up of capitalized direct materials and labor for Block 1 and Block 2 satellites and additional facility and production equipment for our 185,000 square foot assembly, integration, and test facilities in Midland. As expected, capital expenditures trended down in connection with the completion of the Block 1 satellites ahead of ramping Block 2 production. By the end of the second quarter, we incurred and paid all amounts for the five Block One satellites. Total spend for those satellites did not materially exceed our prior estimate of $115 million.

Speaker Change: For our 185000 square foot Assembly integration and test facilities in Midland.

Speaker Change: As expected capital expenditures trended down in connection with the completion of the block one satellites ahead of ramping block to production.

Scott Wisniewski: This FCC authorization followed the March 2024 update of our Constellation Siling with the International Telecommunication Union and related filings with the FCC that placed our planned commercial satellites under the jurisdiction of the United States. This initiative represented a closer strategic alignment of our network buildout and future network operations with the United States and is a key piece of our overall regulatory strategy.

Speaker Change: By the end of the second quarter, we incurred and paid all amounts for the five block one satellites total spend for those satellites did not materially exceed our prior estimate of $115 million. The design integration testing and the launch of satellites and related ground infrastructure is capital intensive.

Andy Johnson: The design, integration, testing, and launch of satellites and related ground infrastructure is capital-intensive. We do expect our experience completing Block 1 will allow us to leverage our learnings to improve and optimize manufacturing costs for our Block 2 satellites. And on the final chart on this slide, we ended the second quarter with $287.6 million in cash up from $212.4 million at the end of the first quarter.

Scott Wisniewski: In addition to the progress Abel reported with 18 team Verizon, we continue to believe our patented technology, including our large phase array antenna technology in space, creates significant opportunities for new mission critical capabilities in the government sector. We are moving forward with these dual use capabilities on our Constellation and expect to generate revenue from both commercial and government applications. In this effect, earlier this year we announced the AST SpaceMobile had been awarded a new contract to a prime contractor working with the United States government.

Speaker Change: We do expect our experience completing block one will allow us to leverage our learnings to improve and optimize manufacturing costs for our block two satellites.

And on the final chart on this slide we ended the second quarter with 287 $6 million in cash up from $212 4 million at the end of the first quarter.

Andy Johnson: This increase includes $55 million of previously announced investment from our valued M&O partner Verizon, inclusive of a $20 million prepayment for future cellular broadband service. Our strength in cash position at the end of Q2 also reflects our disciplined and effective use of our now-completed at-the-market, or ATM, equity facility, from which we raised approximately $80 million during the quarter at increasing market prices for our common, As in the end of July, we completed the two-year use of the existing ATM facility and the existing common stock purchase facility with $164 million of total raise to support operating expenses and preserve our capital for building the constellation.

Speaker Change: This increase includes $55 million of previously announced investment from our valued <unk> partner, Verizon inclusive of a $20 million prepayment for future cellular broadband service.

Scott Wisniewski: This initial phase contract which covered the use of Blue Walker III as well as the first five commercial satellites is well underway and during the second quarter we completed successful in orbit and ground tests resulting in completed contractual milestones and top line revenue. This government sector strategy continues to show additional early signs of strength with two new U.S, government contract awards in recent months to one of our prime contractors. Like the February contract, these awards represent relatively small revenue by themselves but seek to evaluate potential for full scale multi-year contracted services in the future. As is customary, contracts for these two new opportunities are still being finalized and we will provide detail if and when it becomes available.

Speaker Change: Our strengthened cash position at the end of Q2 also reflects our disciplined and effective use of our now completed at the market or ATM equity facility from which we raised approximately $80 million during the quarter at increasing market prices for our common stock.

Speaker Change: As of the end of July we completed the two year use of the existing ATM facility and the existing common stock purchase facility with a $164 million of total raise to support operating expenses and preserve our capital for building the constellation.

Andy Johnson: During this two-year period, we were prudent in our timing and use of these facilities, consuming less than 75% of the combined facility's capacity and raising capital at more than a 50% premium to our stock's volume-weighted average price. We continue to consider using the balance of our Senior Credit Facility, which has a gross amount available to us of $51.5 million.

Speaker Change: During this two year period, we were prudent in our timing and use of these facilities consuming less than 75% of the combined facilities capacity and raising capital at more than a 50% premium to our stocks volume weighted average price.

Scott Wisniewski: Our primary commercialization strategy is to position for significant revenue opportunities as we scale the Constellation but this initial progress is encouraging and we believe the progress represents an upgraded outlook for additional and larger signed contract awards over time.

Speaker Change: We continue to consider using the balance of our senior credit facility, which has a gross amount available to us of $51 5 million to date, however, our efforts around raising strategic capital, including non dilutive prepayments from our <unk> partners as we ready for service are taking precedence over the senior credit facility, which <unk>.

Andrew Johnson: With that, I will now pass it to Andy Johnson, our new chief financial officer to take you through the financial update. Thanks Scott and good afternoon everyone. I joined AST this past May because I believe wholeheartedly in the company's mission to close the digital divide by connecting young connected and was convinced that this was a once-in-a-lifetime opportunity after visiting the manufacturing facilities in Midland, Texas. There I saw first hand the sophistication of the company's technology and most importantly the incredible commitment of our team led by a bell and producing the world's first space-based cellular broadband service satellites.

Andy Johnson: Today, however, our efforts around raising strategic capital, including non-dilutive prepayments from our M&O partners as we prepare for service, are taking precedence over the Senior Credit Facility, which in turn continues to reduce negative carry we would have incurred if we had accessed the facility earlier. Our ability to access this facility remains subject to certain conditions and approvals.

Speaker Change: Churn continues to reduce negative carry we would have incurred if we had access to facility earlier.

Speaker Change: Our ability to access this facility remains subject to certain conditions and approvals.

Speaker Change: I'd like to reiterate that we currently have no plans for the remainder of this year to pursue an underwritten public equity offering.

Andy Johnson: We previously provided guidance on our expected operating expense levels. We have been supporting the development and production efforts of our two critical satellite designs, Block 1 and Block 2, our ASIC chip design, and the five Block 1 satellites. The completion of this Block 1 work and a significant portion of the Block 2 development and ASIC tapeout completion is expected to result in a reduction in our adjusted operating expenses and capital expenditures in future periods.

Speaker Change: We previously provided guidance on our expected operating expense levels, we have been supporting the development and production efforts of our two critical satellite designs block, one and block to our ASIC chip design and the five block one satellites.

Andrew Johnson: This is a seminal moment in the history of AST Space Mobile and I want to personally thank all of my teammates for their dedication to our mission and delivering our first five commercial Bluebird satellites for launch in just a few short weeks. I also want to thank Sean Wallace, our former CSO who continues to consult for us for his leadership, service to the company, and partnership in making my transition seamless. It's a fantastic time to be a part of the AST Space Mobile ecosystem which includes our shareholders, our talented employees across the globe, and our mobile network operator partners. We are at the forefront of our commercial constellation and I deeply appreciate those of you who are on this life-changing journey with us.

Speaker Change: Completion of this block one work and a significant portion of the block two development and ASIC tape out completion is expected to result in a reduction in our adjusted operating expenses and capital expenditures in future periods.

Andy Johnson: Consistent with the first and second quarters of 2024, we continue to project that our adjusted cash operating expenses for the remainder of the year will come in within a range of $30 to $35 million per quarter based on business conditions and speed of Constellation deployment. And as the Block 2 design approaches completion, and our focus turns to scaled production. We believe efforts to optimize our OpEx will result in a run rate at the low end of that range. These figures will vary depending upon manufacturing activity in each period. This guidance does not include the expected costs of approximately $15 million related to the tape out and initial production of our ASIC chip.

Speaker Change: Consistent with the first and second quarters of 2024, we continue to project that our adjusted cash operating expenses for the remainder of the year will come in within a range of $30 million to $35 million per quarter based on business conditions and speed of constellation deployment and as the block two design approaches completion.

Andrew Johnson: Box. Let's review the key operating metrics for the second quarter that are displayed on Slide 10. On the first chart, we see for the second quarter of 2024, we had non-GAP adjusted cash operating expenses of $34.6 million versus $31.1 million in the first quarter. Non-GAP adjusted operating expenses exclude certain non-cash operating costs, including depreciation and amortization and stock-based compensation. These expenses are up slightly from the first quarter due to final block one expenses as we neared the finish line of producing five of the largest satellites ever to be deployed in low-earth orbit, including required travel expenses to the production site in Texas, expedited hiring of engineering talent and connection with our block two mechanical work as we ramp up production of our next satellites and the impact of an approximately one million one time DNA expense reversal and Q1 that affects the quarter over quarter of comparison.

And our focus turns to scaled production.

Speaker Change: We believe efforts to optimize our Opex will result in a run rate at the low end of that range.

Speaker Change: Figures will vary depending upon manufacturing activity in each period.

Speaker Change: This guidance does not include the expected costs of approximately $15 million related to the tape out and initial production of our ASIC chips.

Andy Johnson: These ASIC-related costs will be recognized as R&D expense and subsequent quarters in 2024 as milestones are completed. Timing of the changes in our adjusted operating expenditures and capital expenditures as I've just described could be delayed or may not be realized due to a variety of facts. Finally, we continue to work on developing a financing package from export credit agencies to source cost-effective long-term debt funding of large projects. We will keep your breast of our progress. It's been a fantastic first 90 days.

Speaker Change: These AC related costs will be recognized as an R&D expense in subsequent quarters in 2024 as milestones are completed.

Speaker Change: Timing of the changes in our adjusted operating expenditures and capital expenditures as I've, just described could be delayed or may not be realized due to a variety of factors.

Speaker Change: Finally, we continue to work on developing a financing package from export credit agencies to source cost effective long term debt funding of large projects. We will keep you abreast of our progress it's been a fantastic first 90 days I look forward in the future to getting know many of you and working hard to drive value for our shareholders.

Scott Wisniewski: I look forward in the future to getting to know many of you and working hard to drive value for our shareholders as we position AST for full scale commercial operations. And with that... This completes the presentation component of an earnings call, and I pass it back to Scott. Thank you, Andy. Before we go to the queue of analyst questions, we'd like to address a few of the questions submitted by R&B. Operator, could you please start us off with the first question? Tanner Atts, will you wait until the first BB-Block 2 is launched and unfolded before working on additional BBs? Thanks, Anna, for the question. No, the answer is no.

Andrew Johnson: Turning towards the second chart on this page, our capital expenditures for the second quarter were 21.2 million versus 26.6 million for the first quarter. The figure was made up of capitalized direct materials and labor for block one and block two satellites and additional facility and production equipment for our 185,000 square foot assembly integration and test facilities in Midland. As expected, capital expenditures trending down and connection with the completion of the block one satellites ahead of ramping block two production.

Speaker Change: As we position <unk> for.

Speaker Change: For full scale commercial operations.

Speaker Change: And with that.

Speaker Change: This completes the presentation component of our earnings call and I pass it back to Scott.

Scott: Thank you Andy before.

Scott: Before we go to the queue of analyst questions would like to address a few of the questions submitted by our investors operator could you. Please start us off with the first question.

Will: And will.

Will: Will you wait until the first BB block two is launched and unfolded before working on additional BD.

Speaker Change: Thanks for the question.

Speaker Change: The answer is no we're already working on on the Knicks.

Operator: We're already working on the next, build all the subsequent satellites. We are actually in the process of building parts for the next 17 satellites. The main mechanical system is... Yeah, changes are not great, but it's basically same as Lou Walker, three and block one.

Andrew Johnson: By the end of the second quarter, we incurred and paid all amounts for the five block one satellites. Total spend for those satellites did not materially exceed our prior estimate of $115 million. The design, integration, testing, and launch of satellites and related ground infrastructure is capital intensive. We do expect our experience completing block one will allow us to leverage our learnings to improve and optimize manufacturing costs for our block two satellites.

Speaker Change: Build all the subsequent satellites, we actually in the process of building blocks for the next 17 satellites.

Speaker Change: The main mechanical system is.

Speaker Change: Yes, it changes on upgrade but it's basically the same in Louisville, Kentucky and <unk>.

Speaker Change: We will know weight.

Abel Avellan: And we will know why for that deployment to continue building. So when the process of building actually started, few months back, our next, our next satellite is being built. You know, with the next satellite, we have a satellite that will be equipped with the FPGA and a satellite that will be equipped with the ASIC. The first launch of four will be based on FPGA and the subsequent satellites will be of block two, first four block two and the subsequent after that will be all based on ASIC, which is a time-fall improvement of FPGA.

Speaker Change: Okay.

Speaker Change: For that deployment to continue building so when the peso building actually started few months back.

Speaker Change: Our next.

Speaker Change: Our next satellites.

Andrew Johnson: And on the final chart on this slide, we ended the second quarter with $287.6 million in cash up from $212.4 million at the end of the first quarter. This increase includes 55 million of previously announced investment from our valued M&O partner Verizon, inclusive of a $20 million prepayment for future cellular broadband service. Our strengthen cash position at the end of Q2 also reflects our disciplined and effective use of our now completed at the market or ATM equity facility from which we raised approximately $80 million during the quarter at increasing market prices for our common stock.

Speaker Change: Ben.

Speaker Change: The next satellite we will have a satellite that will be equipped with the FPGA.

Speaker Change: Silo.

Speaker Change: With the ASIC.

Speaker Change: The first launch of four it will be based on EBITDA.

Speaker Change: On the subsequent slide let's say will be.

Speaker Change: <unk>.

Speaker Change: Look to first for block two and the subsequent till after that will be all based on mix on AC which is a 10 fold improvement compared to the year.

Andrew Johnson: As of the end of July, we completed the two year use of the existing ATM facility and the existing common stock purchase facility with $164 million of total raise to support operating expenses and preserve our capital for building the constellation. During this two-year period, we were prudent in our timing and use of these facilities, consuming less than 75% of the combined facilities capacity and raising capital at more than a 50% premium to our stocks volume-weighted average price.

Abel Avellan: And, you know, we're fully focused on building our next batch of satellites and to get them on the air as soon as possible. Matt Ash, you mentioned that full US coverage is the first priority. What regions will you look to fulfill next and in what time? Hey Matt, thank you for the question. Yes, obviously, the US market is the largest. Um...

Speaker Change: Hum.

Speaker Change: We're fully focused on.

In building our mix.

Speaker Change: Batch of satellites and together then on the air sort of closer to us.

Speaker Change: Matt.

Speaker Change: You mentioned that full U S coverage is the first priority what regions. When you look to fulfill next and in what timeframe.

Speaker Change: Hey, Matt. Thank you for the question, yes, our our obviously the U S market is the largest.

Abel Avellan: I'm more- a developed wireless market and in this market we have AT&T and Verizon and definitely prioritizing deployment for the U.S. market Then, we will prioritize investors and M&O that are paying pre-pay revenue. That include both the phone markets, that include Rakuten, In Japan, and then new M&O that are going to be pre-paying for initialization of the service as a priority. We are launching a 50 degree of inclination, so basically we can cover all the attitudes from 59 degrees north to 59 degrees south, so we have the benefit of being able to select the regions that we prioritize according to pre-payments priority set by a new investment. Cody Axe, What concerns that the company has being that we are currently in a solar mess? How susceptible are your satellites to sol- Thank you, Cody, for the question.

Speaker Change: More.

Speaker Change: Develop wireless market.

Speaker Change: And in these market, we have AT&T and Verizon on gift, we will be prioritizing the deployment for the U S market.

Speaker Change: Then we will prioritize.

Speaker Change: Investors.

Speaker Change: On <unk> that are paying prepay.

Andrew Johnson: We continue to consider using the balance of our senior credit facility, which has a gross amount available to us at $51.5 million. To date, however, our efforts are on raising strategic capital, including non-delutive prepayments from our M&O partners as we're ready for service, are taking precedence over the senior credit facility, which in turn continues to reduce negative carry we would have incurred if we had access to facility earlier. Our ability to access this facility remains subject to certain conditions and approvals.

Speaker Change: Revenue.

Speaker Change: That include Vodafone markets that include Rakuten in Japan.

Speaker Change: They're new.

Speaker Change: <unk> that are going to be prepaid.

Speaker Change: Utilization of the service.

Speaker Change: Priority.

Speaker Change: We are launching on a 50 degree I think in Asia. So basically we can cover all the latitude from 59 degrees north to 59 degrees South. So we had the benefit of being able to selected regions that we prioritize according to prepayments failure.

Andrew Johnson: I'd like to reiterate that we currently have no plans for the remainder of this year to pursue an underwritten public equity offering. We previously provided guidance on our expected operating expense levels. We have been supporting the development and production efforts of our two critical satellite designs, block one and block two, our ASIC chip design, and the five block one satellites. The completion of this block one work and a significant portion of the block two development and ASIC tape out completion is expected to result in a reduction in our adjusted operating expenses and capital expenditures in future periods.

Speaker Change: Priorities set.

Speaker Change: And new investors.

Kodiak: Kodiak what concerns that the company has been that we are currently any silver maximum.

Andrew Johnson: Consistent with the first and second quarters of 2024, we continue to project that our adjusted cash operating expenses for the remainder of the year will come in within a range of 30 to 35 million dollars per quarter based on business conditions and speed of constellation deployment and as the block two design approaches completion and our focus turns to scaled production. We believe efforts to optimize our OPEX will result in a run rate at the low end of that range.

Speaker Change: Susceptible or your satellites to solar storms.

Speaker Change: Thank you for the question well first of all before I answer the question, let me remind everybody how we designed the satellites.

Abel Avellan: Well, first of all, before I answer the question, let me remind everybody about how we design these satellites. These satellites, you know, they're big. They are built out of identical modules that we call microns that make the satellite system very resilient and it's built out of a distributed system that no one single part can make the satellite to fail.

Speaker Change: You know there are big they are.

Speaker Change: Build idle identical modules that we call micro loans.

Speaker Change: That made these satellite system very resilient and it's build out of these two to system.

Speaker Change: No one single park, I'm, making solid to fail.

Abel Avellan: And that makes it very resilient to the space weather, including solar storms and other conditions. We have all the data that we have collected over two years operating Blue Walker-3. And we really, of course, we have needed our time to.., to react to solar activities, but never having a failure caused by it. So we are very confident and our satellite resilience is where it needs to be as it relates to weather conditions. Tanner asks, after the first BB, How many at a time will be?

Speaker Change: <unk>.

Speaker Change: That make it very.

Speaker Change: Yes.

Speaker Change: <unk> resilient to the space, whether including solar storms and weather conditions, we had all the data that we've collected over two years operating below what country.

Speaker Change: We really of course, we have.

Speaker Change: It needed a timed to two.

Speaker Change: To react to solar activities, but never having a failure caused by it. So so we are.

Andrew Johnson: These figures will vary depending upon manufacturing activity in each period. This guidance does not include the expected costs of approximately $15 million related to the tape out and additional production of our ASIC chips. These ASIC-related costs will be recognized as our in-depth expense and subsequent quarters in 2024 as milestones are completed. Timing of the changes in our adjusted operating expenditures and capital expenditures as I have just described could be delayed or may not be realized due to a variety of factors. Finally, we continue to work on developing a financing package from export credit agencies to source cost-effective long-term debt funding of large projects. We will keep you abreast of our progress.

Speaker Change: We are.

Speaker Change: Very confident.

Speaker Change: Our satellites resilient.

Speaker Change: This is where it needs to be as it relates to weather conditions.

Speaker Change: Tanner asked after the first BB block team how many at a time will be launched.

Abel Avellan: Okay, well, we have decided, thank you, Tanner, for the question, but we have decided the system, to be launch agnostic. So we basically envelope our profile to be able to support basically every large or medium launch service provider and launch systems. And depending on the size of the launch, I mean, on Block 1, we're launching five satellites in a Falcon 9. And depending on the launch configuration and the launch vehicle, it will be anywhere between four per launch for the new larger block tools or eight per launch, depending on the launch date.

Speaker Change: Okay, well, we have decided thank you Dennis for the question, but we have decided that the system too.

Speaker Change: B launch agnostic, so we basically envelope.

Speaker Change: Our profile.

Speaker Change: But we're able to support basically every large or medium launch service provider launch systems.

Speaker Change: Depending on the size of the launch I mean.

Andrew Johnson: It's been a fantastic first 90 days. I look forward in the future to getting to know many of you and working hard to drive value for our shareholders as we position AST for full-scale commercial operations.

Speaker Change: One we are launching five satellites.

Speaker Change: In <unk>.

Speaker Change: <unk> hundred nine.

Speaker Change: And depending on the launch configuration on the launch vehicle it will be any any anywhere between four for launch for the new larger blocks tools or a per launch.

Scott Wisniewski: And with that, this completes the presentation component of our earnings call and I pass it back to Scott. Thank you, Andy.

Speaker Change: Depending on the launch vehicles.

Scott Wisniewski: Before we go to the queue of analyst questions, we would like to address a few of the questions submitted by our investors.

Operator: And with that, I'd like to thank our shareholders for submitting these questions. Operator, let's open the call to analyst questions now. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate a line is, You may press star 2 if you want to remove yourself from the queue.

Speaker Change: And with that I'd like to thank our shareholders for submitting these questions operator, let's open the call to analyst questions now.

Operator: Operator, could you please start us off with the first question. Tanner, will you wait until the first BB-Block 2 is launched and unfolded before working on additional BB-Block? Thank you for the question.

Speaker Change: Thank you.

Speaker Change: We will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two.

Abel Avellan: No, the answer is no. We're already working on the next build of the subsequent satellites. We are actually in the process of building parts for the next 17 satellites. The main mechanical system is, yeah, changes are not great, but it's basically the same walker tree and block one. We will know why for that deployment to continue building. So when the process of building actually started, a few months back, our next our next satellites build.

Speaker Change: Want to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star 2. One moment, please, as we poll for questions. And our first question comes from the line of Griffin Boss with B Riley Securities. Please proceed with your question. Hi, good afternoon.

One moment please poll for questions.

Speaker Change: Okay.

Speaker Change: And our first question comes from the line of Griffin Boss with B Riley Securities. Please proceed with your question.

Griffin Boss: Thanks for taking my questions. So first for me, the 17 satellites under construction is certainly more than what we expected. How would you characterize your current production capacity? I know in the past you've discussed expectations to reach something, I think equivalent to six satellite per month cadence. Have you have you reached that? Are you are you tracking better? Any more color would be helpful?

Griffin Boss: Hi, good afternoon, thanks for taking my questions.

Griffin Boss: First for me the 17 satellites under construction is certainly more than what we expected how would you characterize your current production capacity I know in the past you've discussed expectations to reach something equivalent to six satellite per month cadence have you reached that are you are you tracking better.

Abel Avellan: You know, with the next satellite, we have a satellite that will be equipped with the FPGA and a satellite that will be equipped with the ASIC. The first launch of four will be based on FPGA. The subsequent satellites will be of block two, first four block two, and the subsequent after that will be all based on ASIC, which is a tenfold improvement compared to the FPGA. You know, we're fully focused in building our next batch of satellites and together on the air soon afterwards.

Speaker Change: Any more color would be helpful.

Abel Avellan: Yeah, I mean, when we say 17 satellites, that refer to the success that we are producing. They don't need to be all produced at the same time. So we actually time them, so we start with the long lead items, we start them first, the parts that take more time to get out of the factory, they are being produced for for 17 units and for that we buy parts in advance. We start manufacturing them, we're in advance.

Griffin Boss: Sure.

Griffin Boss: Yes.

Speaker Change: When we say 17 satellites.

Speaker Change: That are referred to the success that we are producing.

Speaker Change: They don't need to be all produce at the same time.

Speaker Change: So we actually time them. So we start with the long lead items, we started them first.

Speaker Change: The bars that take more time to get out of the factory there in being produced 444 17 units not four.

Speaker Change: That we buy parts in advance we start manufacturing them way in advance.

Abel Avellan: And as we need it, so we keep ordering the different parts for the system. Yeah, we're ramping up. We are we are accelerating our producing production cadence, going through the five first commercial that we're launching now in September. However, it has helped us to expand our production capacity. Also going forward, we have work on vertically integrating, around 95% of these subsystems, so we either control the AP. Manufactured by ourself, and control the manufacturing process for around 95% of the satellites that are on build going forward. Great. Thanks, Abel, for that color.

Abel Avellan: Matt, you mentioned that full US coverage is the first priority. What regions will you look to fulfill next and in what time frame? Hey Matt, thank you for the question. Yes, obviously the US market is the largest. More developed wireless market. In this market, we have 18th amber ice, and yet we will prioritize in deployment for the US market. Then we will prioritize investors and M&O that are paying pre-pay revenue. That include waterfall markets, that include Rakuten in Japan, and then new M&O that are going to be pre-paying for initialization of the service as a priority.

Speaker Change: We need it so we keep ordering.

Speaker Change: The different parts for for the system.

Speaker Change: We're ramping up we are.

Speaker Change: We are accelerating our producer production cadence.

Speaker Change: Going through the five first.

Speaker Change: First commercial that we're launching now in September.

Speaker Change: Help us too.

Speaker Change: Expanding our production capacity.

Speaker Change: Also going forward.

Speaker Change: We have work on vertically integrating.

Speaker Change: Around 95% of the success, so we either control the IP.

Speaker Change: Manufactured by our sales.

Speaker Change: And control of the manufacturing process for around 95% of the Aussie satellite or RMB going forward.

Abel Avellan: We are launching on a 50 degree of inclination, so basically we can cover all the latitudes from 59 degrees north to 59 degrees south, so we have the benefit of being able to select the regions that we prioritize according to prepayments, priorities set by new investors.

Abel Avellan: I appreciate it. And in terms of the initial Block II satellite launch, are you still tracking for the late 4Q, early 2025 kind of launch window there? Are there any delays or issues you're seeing with the launch provider? No, we're still tracking for Q1 2025. Okay, great. Great. Glad to hear it.

Speaker Change: Great. Thanks for that color I appreciate it and in terms of the initial block two satellite launch are you still tracking for the late <unk> early 2025.

Speaker Change: Kind of launch window, there are there any delays or issues, you're seeing with the with a large provider.

Speaker Change: No we are still tracking for Q1 2025.

Abel Avellan: Cody Ag, what concerns does the company have being that we are currently in solar maximum? How susceptible are your satellites to solar storms? Thank you for the question.

Abel Avellan: And then, so, Scott, there was sort of an informal interview with you recently on a financial blog where you cited some ARPU assumptions for the U.S. I can't recall hearing the company formally mention potential ARPU in the past, so I would love it if there are any assumptions or expectations for ARPU you can share today, especially now that you've, you know, got two definitive agreements under your belt. Hey, Griffin, how you doing?

Scott: Okay, great great glad to hear it and then Scott there was sort of an informal interview with you recently on a financial blog, where he started some <unk> assumptions for the USA I can't recall hearing the company formally mentioned potential ARPA in the past so I.

Abel Avellan: Well, first of all, before I answer the question, let me remind everybody about how we design these satellites. Well, these satellites, as you know, they are big. They are built out of identical modules that we call microns that make the satellite system very resilient and it's built out of a distributed system that no one single part can make the satellite to fail. That makes it very resilient to the space weather, including solar storms and other conditions.

Speaker Change: We'd love it if there are any assumptions or expectations for our probably you can share today, especially now that you've got two definitive agreements under your belt.

Scott Wisniewski: No, we've been making a lot of progress with commercial agreements, and alongside that, been advancing our go-to-market strategies, as you would expect. We don't have any pricing or go-to-market strategies to report at this time, and I think that article was misquoted. But, you know, we're very excited about the revenue share model that we've been, you know, pushing for a long time. And we're very excited about the adoption rates and the ability to command good wallet on this service.

Speaker Change: Hey, Griffin How're you doing.

Speaker Change: We've been making a lot of progress with commercial agreements and alongside that been advancing our go to market strategies as you would expect we.

Speaker Change: We don't have any <unk>.

Speaker Change: Pricing or go to market strategy to report at this time and I think that article was misquoted, but.

Abel Avellan: We have all the data that we have collected over two years operating Blue Walker 3. Of course, we have needed a time to to react to solar activities, but never having a failure caused by it. So we are very confident on our satellite resilience is where it needs to be as it relates to weather conditions.

Speaker Change: We're very excited about the revenue share model that we've been pushing for a long time and we're very excited about the.

Speaker Change: The adoption rates and the ability to command.

Scott Wisniewski: So, no pricing guidance at this time, but I would say that go-to-market planning has definitely accelerated. Okay, got it, understood. Thanks, Scott. And last for me, very quickly, and I'll pass it off. I just want to confirm that this new contract liabilities line item we're seeing in the statement of cash flows, is that reflecting the Verizon revenue commitment, or is that something else? This is this is Andy Griffin.

Speaker Change: Good wallet on this on the service so no no pricing guidance at this time, but but I would say that go to market planning.

Speaker Change: Has definitely accelerated.

Speaker Change: Okay got it understood. Thanks, Scott and last for me very quickly and I'll pass it off I just want to confirm that this new contract liabilities line item, we're saying in the statement of cash flows is that reflective reflecting the horizon revenue commitment or is that something else.

Abel Avellan: Tanner asked, after the first BB-block 2, how many at a time will we launch? Okay, well we have decided, thank you for the question, but we have decided the system to be launch-and-nostic. So we basically envelope our profile that we are able to support basically every large or medium launch service provider and launch systems. And depending on the size of the launch, I mean on block 1 we are launching 5 satellites in a 5.9. And depending on the launch configuration and the launch vehicle, it will be anywhere between 4 per launch for the new larger block 2s or 8 per launch, depending on the launch vehicles.

Andy Johnson: I do think it's it's the revenue commitments against the prepayments and so forth. So none of that's none of that's revenue at this point yet until the services are initiated. Got it.

Speaker Change: Yeah. This is this is Andy Griffin I do think it's the revenue commitments against the prepayments and so far so none of that none of that is revenue at this point yet until the services are initiated.

Griffin Boss: Okay. Thanks, Andy, and welcome to the company, and thanks for taking my questions, everyone. Thank you. Our next questions come from the line of Benjamin Soff with Deutsche Bank. Please proceed with your question. Yeah, hey, guys.

Got it okay, Thanks, Andy and welcome to the company and thanks for taking my questions everyone.

Speaker Change: Thank you.

Speaker Change: Our next questions come from the line of Benjamin soft with Deutsche Bank. Please proceed with your question.

Benjamin Soff: Thanks for taking the question. Exciting quarter with a lot of interesting developments. I was wondering, now that the satellites are on site in Florida, can you walk us through the timeline and key milestones between launching in early September until you get to commercial service? Yeah, we actually Hi, Ben, how are you?

Benjamin Soft: Yeah, Hey, guys. Thanks for taking the question on the quarter with a lot of <unk>.

Benjamin Soft: Interesting development I was wondering now that the satellites are on site in Florida can you walk us through the timeline and key milestones between launching in early September until you get to commercial service.

Scott Wisniewski: And with that, I'd like to thank our shareholders for submitting these questions.

Operator: Operator, let's open the call to analyst questions now. Thank you. We will now be conducting a question and answer session.

Abel Avellan: So we actually indicate now we were on final preparation for launch. I'm a, The plan is to launch early September, first half of September, when it dissipates, few months to basically activate, service on those first five satellites. We have two types of users already booked on them. One is a Gorman user, and then we have our MNOs.

Benjamin Soft: Yes, we actually hi, Ben how are you so we actually indicate now.

Operator: If you would like to ask the question, please press star 1 on your telephone keypad. A confirmation call will indicate a line isn't a question key. You may press star 2 if you want to remove yourself from the key.

Speaker Change: One final preparation for launch.

Benjamin Soft:

Benjamin Soft: Sure.

Benjamin Soft: The plan is to launch early September.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please, as we pull 4 questions.

Benjamin Soft: First half of September.

Speaker Change: We anticipate.

Benjamin Soft: Few months.

Benjamin Soft: Basically activate <unk>.

Speaker Change: Service on both clarify satellites.

Speaker Change: We have two double users already book on them.

Griffin Boss: And our first question comes from the line of Griffin Boss with B-Reilly Securities. Please proceed with your question. Hi, good afternoon. Thanks for taking my questions. So first for me, the 17 satellites under construction is certainly more than what we expected. How would you characterize your current production capacity? I know in the past you've discussed expectations to reach something I think equivalent to six satellites per month cadence. Have you reached that? Are you tracking better? Any more colored? Be helpful.

Gorman: One is gorman.

Gorman: User.

Gorman: And then we have our.

Abel Avellan: Yeah, I mean, when we say 17 satellites that refer to the success that we are producing, they don't need to be all produced at the same time. So we actually time them. So we start with the long lead items. We start them first, the parts that take more time to get out of the factory. They are being produced for for for 17 units. For that, we buy parts in advance. We start manufacturing them, we're in advance.

Speaker Change: Or <unk>.

Abel Avellan: We are prioritizing U.S. Vodafone and our investors and people that have an M&O that are preparing or are going to prepare for services. And so in terms of timeline is we launch, A few months to activate services, and then we are ready preparing and have prepared the all the ground infrastructure to start connecting to the spacecraft. So we will have some early usage immediately after for the government, empathlete with the MNL. Okay, great. And then just going back to the 17 block two satellites.

Speaker Change: We are prioritizing U S.

Speaker Change: Vodafone our investors some people on them and all of them are prepaying or are going to prepay.

For services.

Speaker Change: Sure.

Speaker Change: So internal timeline as we launch.

Speaker Change: Few months to activate services.

Speaker Change:

Speaker Change: Then.

Speaker Change: We are already preparing and have prepared the all the ground infrastructure to.

Speaker Change: Connect into the.

Speaker Change: Spacecraft so awesome.

Speaker Change: Early usage immediately after for the government.

Speaker Change: In parallel with the <unk>.

Benjamin Soff: Do you have any updated thoughts on the cost per satellite and the timing to launch those? Yeah, we are maintaining our guidance on costs. Actually, we continue to look for ways to continue to improve our cost basis.

Speaker Change: Okay, Great and then just going back to the 17 block two satellites do you have any updated thoughts on the cost per satellite and the timing to launch those.

Abel Avellan: We are getting close to 95% vertical integration, but the guidance per satellite remains the same. And as I said, we're starting a launch campaign, starting in Q1, and then following up with additional launches. These satellites are ready and the launches are available. Okay, great.

Speaker Change: Yes, we are maintaining our guidance on costs.

Abel Avellan: And as we need it, so we keep ordering the different parts for the system. Yeah, we're ramping up. We are we are accelerating our production, production cadence going through the five first commercial that we're launching now in September. It has helped us to expand our production capacity and also going forward. We have work on vertically integrating, around 95% of the subsystems, so we either control the AP, manufacture by ourselves, and control the manufacturing process around 95% of the satellites that are on the bill going forward.

Speaker Change: Actually.

Speaker Change: We continue to look for ways to continue to put a local basis.

Speaker Change: We again into close to 95% vertical integration.

Speaker Change: But the guidance for satellite remain the same.

Speaker Change: <unk>.

Speaker Change: And as I said, we are starting our launch campaign starting in Q1.

Speaker Change: And then following up with wood.

Speaker Change: Additional launches.

Speaker Change: Satellites are already.

Speaker Change: <unk> on the on the launches are available.

Benjamin Soff: Thanks, guys. Thank you. Our next question comes from the line of Chris Schoell with EBS. Please, Great, thank you.

Speaker Change: Okay, great. Thanks, guys.

Aaron: Thank you Aaron.

Speaker Change: Our next question comes from the line of Chris Shaw with UBS. Please proceed with your question.

Chris Schoell: We've seen a number of regulatory milestones here in recent months. Can you help us think through your remaining approval process here in the U.S. and the likely timeline for that? And I think there was general optimism previously that other countries could follow suit with similar rulemaking to the U.S. Have you seen any evidence of that to date? Hey, Chris, Scott here. Yeah, so clearly, we're happy with the progress this year on the regulatory front, as we mentioned in our remarks. And the FCC does truly play a leadership role globally with other countries.

Chris Shaw: Great. Thank you we've seen a number of regulatory milestones here in recent months can you help us think through your remaining approval process here in the U S and the likely timeline for that and I think there was general optimism previously that other countries could follow suit with similar rulemaking to the U S have you seen any evidence of that to date.

Abel Avellan: Great, thanks Abel for that color, I appreciate it. And in terms of the initial block to satellite launch, are you still tracking for the late 4Q early 2025 kind of launch window there, are there any delays or issues you're seeing with the launch provider? No, we're still tracking for Q1 2025. Okay, great, great, glad to hear it.

Scott Wisniewski: So in our initial markets, we're working with our close partners on moving all the regulatory processes forward. You know, we've been, Relatively pleased with how that's progressed with no showstoppers, really, you know, we really view it as a process that we go through diligently and that the SEC's done a fair lot of leadership this year with developing new new rules for supplemental coverage from space and things like that. So so for us.

Scott: Hey, Chris It's Scott here.

Scott: Yes, so clearly we're happy with the progress this year on the regulatory front as we mentioned in our remarks and in the FCC does.

Griffin Boss: And then, Scott, there was sort of an informal interview with you recently on a financial blog where you started some ARPU assumptions for the US, I can't recall hearing the company formally mentioned potential ARPU in the past, so we'd love it if there are any assumptions or expectations for ARPU. You can share today, especially now that you've got two definitive agreements under your belt.

Chris Shaw: Truly play a leadership role globally.

Speaker Change: With other countries. So in our initial markets, we're working with our close partners on moving all the regulatory processes forward.

Speaker Change: We have been.

Speaker Change: Relatively pleased with how that's progressed.

With no Showstoppers really.

Speaker Change: Really view it as a process that we go through diligently in and that the FCC's demonstrate a lot of leadership this year with developing new new rules for supplemental coverage from space and and things like that so so for us.

Scott Wisniewski: Hey, Griffin, how you doing? No, we've been making a lot of progress with commercial agreements, and alongside that, been advancing our go-to-market strategies, as you would expect. We don't have any pricing or go-to-market strategies for a port of this time, and I think that article was misquoted, but we're very excited about the revenue share model that was been pushing for a long time. And we're very excited about the adoption rates and the ability to command a good wallet on this service. So no pricing guidance at this time, but I would say the go-to-market planning has definitely accelerated.

Griffin Boss: Okay, I got to understand. Thanks, Scott.

Scott Wisniewski: I think initial markets are trending positively in the US. Next milestones look forward. There'll be a lot of filings going forward. I think, you know, part of commercial service is just there's a lot of regular filings that come.

Speaker Change: Initial markets are trending positively.

Speaker Change: In the U S. Next milestones look forward there'll be there'll be a lot of filings going forward I think part of commercial services, just because a lot of regular filings that come so there'll be filings about gateways on the ground there will be filings about.

Scott Wisniewski: So there'll be filings about gateways on the ground. There'll be filings about test campaigns on when we first start getting block one going. And then that's something that will be, they'll start seeing filings on that with us and with our two partners in the US. Okay, great. And if I can just fit in one more, I think you mentioned no public equity offering this year, but as you look toward block two and beyond, can you just help us think through the timing of additional funding requirements? And how do you think about the trade-offs for different capital sources going forward? Thank you. Sure, this is this is Andy.

Speaker Change: Test campaigns on.

Speaker Change: When we first start getting block ongoing and then the big one is.

Speaker Change: Yes.

Speaker Change: Rates in the U S with the FCC. So that is that's something that will be.

Speaker Change: I'll start seeing filings on that with us.

Griffin Boss: And last for me, very quickly, I'll pass it off. I just want to confirm that this new contract liabilities line out, and we're seeing in the statement that cash flows, is that reflecting the Verizon revenue commitment, or is that something else? Yeah, this is Andy Griffin. I do think it's the revenue commitments against the prepayments and so forth. So none of that's revenue at this point yet, until the services are initiated. Got it.

Speaker Change: And with our two partners in the U S.

Speaker Change: Okay, great and if I can just fit in one more I think you mentioned no public equity offering this year, but as you look toward block two and beyond can you just help us think through the timing of additional funding requirements and how do you think about the tradeoffs for different capital sources going forward. Thank you.

Andy Johnson: Chris, thanks for the question. So, as we noted, I think our priority right now is to continue our current operating model of working on prepayment relationships with our M&O partners. That's been a very effective way to raise required capital, and we have a number of M&O partners that we're making progress with in that respect.

Speaker Change: Sure. This is this is Andy Chris Thanks for the question. So as we noted I think our priority right. Now is to continue our current operating model of working on prepayment our relationships with our <unk> partners. That's been a very effective way to raise required capital and.

Griffin Boss: Okay, thanks, Andy, and welcome to the company. And thanks for taking my questions, everyone. Thank you.

Andy Johnson: So, non-dilutive approach is sort of how we're viewing our near-term opportunity. We also have, in that same vein, we have the opportunity to realize certain milestones in connection with the launch with respect to our existing M&O partners among Vodafone and AT&T and Verizon, which could be meaningful capital. And we'll continue to analyze what's available to us. We're very cognizant of different capital structures, debt, equity opportunities, but we wanted to reiterate the fact that we are focused on being good custodians and weighing the capital needs that are inherent to a satellite business that's as capital intensive as we are, with the fact that our shareholders expect us to be responsible as it relates to dilution. So, I reiterated our point from last quarter that we have no current plans to do a public security equities offering. And that's our plan for the end of 24.

Benjamin Soff: Our next question is come from the line of Benjamin Solff with Deutsche Bank. Please proceed with your question. Yeah, hey guys, thanks for taking the question.

Speaker Change: A number of M&A partners that we're making progress with in that respect. So non dilutive approach is sort of how we're viewing our near term opportunity. We also have.

Benjamin Soff: I'm excited in quarter with a lot of interesting developments. I was wondering now that the satellites are on site in Florida. Can you walk us through the timeline and key milestones between launching in early September until you get to commercial service? Yeah, we actually, hi Ben, how are you? So we actually indicate now we were on final preparation for launch. The plan is to launch early September. First half of September, we'll dissipate a few months to basically activate service on those per five satellites.

Speaker Change: In that same vein we have.

Speaker Change: The opportunity to realize certain milestones in connection with the launch.

Speaker Change: With respect to our existing <unk> partners, among Vodafone and AT&T, and Verizon, which could be meaningful capital.

Speaker Change: And we will continue to analyze what's available to us.

Speaker Change: We're very cognizant of.

Speaker Change: Of different capital structures.

Speaker Change: Debt.

Speaker Change: Equity opportunities, but we wanted to reiterate the fact that we are focused on.

Speaker Change: Being good custodians and.

Speaker Change: Wayne the capital needs that are inherent to our satellite business. That's as capital intensive as we are with the fact that our shareholders expect us to be responsible as it relates to dilution. So I reiterated our point from last quarter that we have no current plans to do a public security equity offering and Thats our plan for the end.

Benjamin Soff: We have two types of users already booked on them. One is a gourmet user and then we have our M&O's. We are prioritizing US, telephone and our investors and people that have an M&O's are going to prepare for services. And so in demo timeline is we launch a few months to activate services and then we are ready preparing and have prepared the all the ground infrastructure to start connecting to the spacecraft. So we will have some early usage immediately after for the government in battle with the M&O's.

Benjamin Soff: Okay, great.

Andy Johnson: And we think we have a lot of opportunity to continue to make progress on cash as we optimize some of our expenses and turn toward a real focus on Block 2 for the remaining four or five months of the year. Great, thank you very much. Thank you. Our next question comes from the line of Chris Quilty with Quilty Analytics, please proceed with your question. So I noted that. Hey, Chris. Yes, Scott here. I think all of the above are on the table, Chris, over time, right?

Speaker Change: 24.

Speaker Change: We think we have a lot of opportunity to continue to make progress on cash.

Speaker Change: As we optimize some of our expenses and turned toward a real focus on block two for the remaining.

Speaker Change: Four or five months of the year.

Speaker Change: Great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Chris Quilty with Quilty analytics analytics. Please proceed with your question.

Chris Quilty: Thank you.

Chris Quilty: I noted that in the press release, you mentioned that there was an outlook for larger size.

Benjamin Soff: And then just going back to the 17 block two satellites, give any updated thoughts on the cost per satellite and the timing to launch those. Yeah, we are maintaining our guidance on cost. Actually, we continue to look for ways to continue to improve our cost basis as we are getting to close to 95% vertical integration, but the guidance per satellite remains the same. And as I said, we are starting a launch campaign to start in Q1 and then following up with additional launches as it satellites are already on the and the launches are available.

Speaker Change: Government contract awards.

Speaker Change: I mean are we talking kind of like zippers phase III or some otas or budget line item in terms of the types.

Benjamin Soff: Okay, great. Thanks, guys.

Speaker Change: Types of programs that.

Speaker Change: You might be able to participate in.

Scott: Hey, Chris It's Scott here.

Scott: I think all of the above are on the table, Chris over time right.

Chris Quilty: The contracts that we announced earlier in the year and then the awards we referenced on this call, these are all, like I said, early opportunities, small revenue, kind of the super or phase one type of stuff that you referred to. But as you know, the intent of programs like that is not to do a science project, but rather to build out a capability. And so, that's what we were referring to in our remarks, that initial tests are going well, other initial contracts, awards have been made through our prime contractor partners, and the outlook for those has improved. Gotcha. Mentioning your prime contractors, you know, some of those are involved.

Speaker Change: The contracts that we announced earlier in the year and then the awards as referenced on this call. These are all like I said early opportunities small revenue.

Chris: Kind of the silver or a phase one type of stuff that you referred to but as you know the intent of programs like that is not.

Chris: To do a science project, but rather to build out a capability and so that's that's what we are referring to are in our remarks that initial.

Chris: Initial tests are going well other initial contracts awards have been made through our prime contractor partners and.

Chris Schoell: Thank you. Our next question comes from the line of Chris show with EBS. Please proceed with your question. Great. Thank you. We've seen a number of regulatory milestones here in recent months.

Chris: And the outlook.

Chris: Are those has improved.

Scott Wisniewski: Can you help us think through your remaining approval process here in the US and the likely timeline for that. And I think there was general optimism previously that other countries could follow suit with similar rulemaking to the US. Have you seen any evidence of that to date? Hey Chris, it's got here. Yeah, so clearly we're happy with the progress this year on the regulatory front, as we mentioned in our remarks and and the FCC does truly play a leadership role globally with other countries.

Speaker Change: Gotcha and.

Speaker Change: Mentioning your prime contractors.

Speaker Change: Some of those are involved in the P Leo contract.

Speaker Change: Is it fair to assume that that could be a potential vehicle for funding or.

Speaker Change: Yeah.

Scott Wisniewski: We don't want to comment on specific, specific programs at this time, Chris. Also, just back. It's fair to assemble, sort of the gating- No, Chris, I mean the size of the satellite, the 2400 square feet, the largest size for block tools is independent if they are equipped with FPGA or ASIC. We have completed the ASIC-FPE DayBout. The first launches, will be still on an FPGA configuration, but we can keep launching on FPGA for as long as it's needed, so there's no upper requisite for launches, but of course we want to incorporate the ACGAS.

Speaker Change: We don't we don't want to comment on specific.

Chris: Specific programs at this time Chris.

Chris: Also just a.

Scott Wisniewski: So in our initial markets, we're working with our close partners on moving all the regulatory processes forward. You know, we've been relatively pleased with how that's progressed with no showstoppers really. You know, we really view it as a process that we go through diligently and and that the FCC's demonstrated a lot of leadership this year with developing new rules for supplemental coverage from space and things like that. So for us, I think initial markets are trending positively in the US.

Speaker Change: Back to the ASIC I mean.

Speaker Change: <unk>.

Speaker Change: Is it fair to assume that the EC production or delivery into production.

Speaker Change: Sort of the gating factor for scaling up to the full block two satellites.

Speaker Change: No Chris I mean the.

Speaker Change: The size of the satellite the 'twenty 400 square feet.

Speaker Change: Largest SAIS for Brookdale as independent they are equally with SBA or ASIC.

Speaker Change: We have completed the ASIC FBA tape out.

Scott Wisniewski: Next milestones look forward. There'll be a lot of filings going forward. I think, you know, part of commercial service is just there's a lot of regular filings that come. So there'll be filings about gateways on the ground. There'll be filings about test campaigns on when we first start getting block one going. And then the big one is SCS rights in the US with the FCC. So that's something that will be, they'll start seeing filings on that with us and with our two partners in the US.

Chris Schoell: Okay, great.

Speaker Change:

The first launches will be is still on FPGA.

Speaker Change: Configuration.

But we can we can keep launching on SBA for loneliness is needed so theres not a prerequisite for launches.

Speaker Change: But of course, we want to incorporate the Acs studies obtain time increasing capacity per satellite.

Abel Avellan: That is a 10-time increase in capacity per satellite, and we're very happy to conclude the tape-out. We received the first dive several weeks back, and we're incorporating it into our micron design as we continue to build the next batch of satellites. Thank you. At this time, I'm showing no further questions. I would like to turn the call back over to management for a question.

Speaker Change: We're very happy to conclude the tape out is we would receive the first day.

Andrew Johnson: And if I can just fit in one more, I think you mentioned no public equity offering this year, but as you look toward block two and beyond, can you just help us think through the timing of additional funding requirements, and how do you think about the trade-offs for different capital sources going forward? Thank you. Sure, this is Andy. Chris thinks for the question. So as we noted, I think our priority right now is to continue our current operating model of working on pre-payment relationships with our M&O partners.

Speaker Change: Several weeks back.

Speaker Change: We are incorporating into our micron design.

Speaker Change: We continue to build.

Speaker Change: The next batch of satellites.

Speaker Change: Great. Thanks for all the details.

Speaker Change: Thank you.

Speaker Change: At this time I'm showing no further questions I would like to turn the call back over to management for closing remarks.

Operator: Thank you, Operator. You know, we're building a space-based cellular broadband network designed for the use of the phone in your pocket today and other government applications. We want to thank all of our shareholders and the research analysts for joining the call and everyone's continued strong support of our mission, and we look forward to the upcoming launch. Thank you. And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation. [music] Thanks for watching, and don't forget to like and subscribe to our channel, https://www.spacevidcast.com Andres Ituarte, James Ratzer, Thanks for watching! AST SpaceMobile, We'll see you next time! [inaudible]

Speaker Change: Thank you operator.

Speaker Change: We're building a space based cellular broadband network designed for the use of the phone in your pocket today and other government applications.

Andrew Johnson: That's been a very effective way to raise required capital, and we have a number of M&O partners that we're making progress with in that respect. So non-delutive approach is sort of how we're viewing our near-term opportunity. We also have in that opportunity to realize certain milestones and connection with the launch with respect to our existing M&O partners among Vodafone and AT&T and Verizon, which could be meaningful capital. And we'll continue to analyze what's available to us.

Speaker Change: Want to thank all of our shareholders and research analysts for joining the call and everyone's continued strong support of our mission and we look forward to the upcoming launch. Thank you.

Speaker Change: And this concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Yes.

Andrew Johnson: We're very cognizant of different capital structures that equity opportunities. But we wanted to reiterate the fact that we are focused on being good custodians and weighing the capital needs that are inherent to a satellite business that's as capital intensive as we are with the fact that our shareholders expect us to be responsible as it relates to delusion. So I reiterated our point from last quarter that we have no current plans to do a public security equity's offering.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Andrew Johnson: And that's our plan for the end of 24. And we think we have a lot of opportunity to continue to make progress on cash as we optimize some of our expenses and turn toward a real focus on block two for the remaining four or five months of the year.

Chris Quilty: Great. Thank you very much. Thank you.

Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Sure.

Speaker Change: Okay.

Speaker Change: Okay.

Scott Wisniewski: Our next question comes from the line of Chris Quilty with Quilty Analytics. Please proceed with your question. Thank you. So I noted that in the press release, you mentioned that there is an outlook for larger size government contract awards. And I mean, are we talking kind of like Sivers phase three or some OTAs or budget line item in terms of the types of programs that you might be able to participate in?

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Scott Wisniewski: Hey Chris, yeah, it's got here. I think all of the above are on the table Chris over time, right? The contracts that we announced earlier in the year and then awards we referenced on this call, these are all like I said early opportunities, small revenue, kind of the silver or phase one type of stuff that you refer to. But as you know, the intent of programs like that is not to do a science project, but rather to build out a capability.

Speaker Change: Okay.

Speaker Change: [music].

Scott Wisniewski: And so that's that's what we were referring to on our remarks that, you know, initial tests are going well. You know, other initial contracts awards have been made through our prime contractor partners and the outlook for those has improved. Gotcha, mentioning your prime contractors, some of those are involved in the P.

Abel Avellan: Leo contract, is it fair to assume that that could be a potential vehicle for funding, or we don't want to comment on specific specific programs at this time, Chris? Also just back to the ASIC, I mean, you know, is it fair to assume that the ASIC production, or, you know, delivery into production, is sort of the gating factor for, you know, scaling up to the full block two satellites? No, Chris, I mean, the size of the satellite, the 2400 square feet, the largest size for block two, is independent, if they are equipped with FPGA, or ASIC, we have completed the ASIC tape out, the third launches will be still on an FPGA configuration, but we can keep launching on FPGA for long as it's needed, so there's no upper requisite for launches, but of course, we want to incorporate the ASIC as that is at the same time increasing capacity for satellite.

Abel Avellan: We're very happy to conclude the tape out is, you know, we received the first guide several weeks back, and we're cooperating into our micro design. Are we continuing to build the next batch of satellites? Great, thanks for all the details.

Chris Quilty: Thank you.

Operator: At this time, I'm showing no further questions.

Scott Wisniewski: I would like to turn the call back over to the management for a code in the market. Thank you, operator. You know, we're building a space-based cellular broadband network designed for the use of the phone in your pocket today and other government applications. We want to thank all of our shareholders and the research analysts for joining the call, and everyone's continued strong support of our mission, and we look forward to the upcoming launch. Thank you.

Operator: And this concludes today's conference and you may disconnect your lives at this time. Thank you for your participation. Thank you.

Andres Ituarte: Andres Ituarte, Andrew Johnson, James Ratzer, Michael Crawford, Christopher Quilty Andres Ituarte, Andrew Johnson, James Ratzer, Michael Crawford,