Hello everyone.

I'll cut to the chase.
100x by 2030.
2x by May 2023.

Lets start.

BREAKDOWN

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WHO – Avellan Space Technology and Science.

WHAT – Building satellites that can connect to unmodified cellphones and other IoT devices.

WHERE – Technology is being developed in Midland Texas but services will be available all over the world where regulators permit.

WHY – Cell towers are profitable for population-dense areas, many places do not have enough population density or infrastructure for cell towers.

HOW – ASTS satellites will operate as relays or cell towers in space.

RISKS

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1. Technology does not work – If ASTS Blue Walker 3 (BW3) final demonstration satellite fails to unfurl or connect to devices on the ground then the company will be in deep trouble because they wont be able to test their technology.
2. Unfurling of the satellite – Expected to unfurl around the 10th of November. If the satellite fails to unfurl then the technology cannot be tested.
3. Backhaul antennas do not work as intended – Technology cannot be tested.
4. Funding runs out – I'll get into this later.
5. Low level competitors – Oneweb, Project Kuiper, Iridium etc. They all need dishes or special equipment and will not be able to provide the level of service ASTS will be capable off and therefore they are not a concern.
6. High level competitors – Starlink (NOT SPACEX), Apple, lynk etc. They are planning to do something somewhat similar but they claim that their technology will only be capable of doing text messages and perhaps voice calls in the future.
7. Regulatory risks – Sorted out by ASTS partners, the MNOs (Mobile Network Operators).
8. Legal battle risks – ASTS has a patent moat and there's been an increase in the amount of competitors joining the race. Patents are insured by lloyds of london.
9. Newly signed MNOs do not have exclusive MoUs.

STRENTHS AND OPPORTUNITIES

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1. First mover advantage.
2. 2400 patent and patent claim moat.
3. Expert Board of Directors.
4. Cult-like investor following.
5. 1.8B+ potential subscribers under MNO MoUs (Memorandum of Understanding).
6. High margin business – Expected margins expected to be 90-95%.
7. No need to own spectrum – Spectrum is super expensive.
8. Bigger satellites than the competition – Physics dictate that better = better if you want to connect to normal phones on the groun.
9. ~25 MNO partners – Competitors dont have this.
10. Classified mission upon completion of commercial testing of BW3 (Private DD suggests defense use case).

11. 50/50 Revenue split – MNOs do the billing, customer acquisition etc. ASTS just sells bandwidth with a wholesaler model.

    1. BW3/ BB1-5/ BB6+/Starlink Gen 2 sizes in meters.
       7×9/7×9/20×17.8/5×5

Okay so we've got facts, now lets get some analysis done.

If the technology doesnt work then ASTS should have enough funds to launch its Blue Bird satellite and conduct some testing on that.

The satellite is partially unfurled already and that unfurling happened when some very specific factors all happened at the same time. Namely a spy satellite within range of the BW3 satellite, over a gateway among some other factors.

Backhaul antennas look like they use a motor or servo so there shouldn't be any issue with them.

Funding runs out – I WILL GET TO THIS LATER I PROMISE.

The competitors – Starlink is a competitor to traditional MNOs which makes it unlikely for them to receive many partnerships, they need partnerships for the spectrum.
Apple has a deal with GSAT for an emergency text service but apple can't face MNOs head on because the MNOs will promote android instead.
Lynk – poor and crap but their satellites connected to phones on the ground. They wont be able to compete against ASTS once ASTS is up.

ASTS has a first mover advantage in this space. Their satellite is in space.
Huge patent and patent claim moat, this is a roadblock to those competitors.

Their board of directors, I cant post images but there is an infographic that really shows it well.

Cult like investors – Check your twitter and the ASTS subreddit if you dont believe me.

Lots of potential subscribers under the MoUs. Important thing to note is that a lot of potential customers aren't subscribers because there is no coverage where they live. It will take time to get those customers signed up and using the service.
Not all potential subscribers will sign up for the service, primarily those that live in cities.

MNOs have to buy spectrum so ASTS wont need to.

FUNDING

ASTS has around 200m in cash, is burning around 40m per quarter and expects to pay ~16m per satellite.
They need 20 satellites to finish their phase 1 constellation.
I estimate that they need 400-500m in financing.

Below is separate DD I conducted into ASTS financing which was specifically written for people currently invested in ASTS
Q2 ER part of a transcript below.

Griffin, Scott here. I'll take that one. So I think first off, we continue to believe that we qualify under a prospective 5G for America FCC fund. Details on that have not been released, but still in process, but we continue to believe that we qualify for that based on the rule making from a little while ago, and that's an opportunity for us for sure. And globally, there are similar types of funding available. We haven't talked about those specifically. But generally speaking, I'd say our message and our story has been pretty well received. And there are — apart from grants, there's also government-supported debt that's available. And so I think our story continues to resonate well with governments, with regulators. And importantly, as we get closer and closer to a launch, and we delivered a satellite to Cape Canaveral, seeing that satellite, seeing the tangible milestone has been very powerful with a lot of different audiences. But we continue to believe we qualify for that prospective FCC fund, but we're in a wait mode there.

1. Management believes they qualify for the FCC rural 5G fund. I'm not sure when we will receive information whether ASTS will be awarded any funds from that.

2. Globally there are similar types of funding and interestingly enough ASTS has offices all around the world including within the EU. I'll be nice though and assume we dont win any funding or grants.

   1. Government supported debt. There is debt available. My guess is as good as yours but I assume this debt depending on the interest rate will be available if BW3 is a success.

3. ASTS story resonates well with governments and regulators (plural). Remember this is cutting/bleeding edge technology. ASTS needs to prove themselves.

4. Stakeholders want to see BW3 work, they want tangible results. Why bother with more risk when you can get less risk? Why help ASTS when they still have to prove their tech works when you can just wait to see the tech working.

5. Updated S-3. If ASTS was planning on diluting to finance the first phase of their constellation then why bother filing a new S-3 which gives the company significantly more flexibility when it comes to funding?

6. Dilution hurts Abel more than anyone. Dilution hurts the CFO making these decisions re: financing. Nobody in the company wants dilution.

   1. Strategic investors/MNOs. AT&T's CEO has stated that they believe they're ahead of all competitors. I'm not sure if he meant Whether it is just the technology that is taking them ahead or if they're completely ahead in the sense that they believe they will be first to market but it is still important.

7. Multiple ASTS MNO partners have started selling of tower assets. Perhaps this is being used to pay down their own debts or perhaps some of it will be available to ASTS. Remember that those companies have to do what is best for their investors.

8. It is in the best interests of the MNOs partnered with ASTS to ensure that ASTS survives. If ASTS is making 5B then that means the MNOs are also making 5B, this is not chump change.

   1. Some MNOs have great views on how the technology is progressing. If those MNOs who have engineers helping ASTS, those same MNOs that will be conducting testing WITH ASTS dont believe the tech will work then it was all a pipe dream. But we don't believe that because we have no reason to.

So my message to all those who are worried about dilution, take a chill pill. If the company does dilute, my estimates put dilution at 15-50% of the current float. 50% of a 100x is a 66.67x. Does that sound like a good deal to you?

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There is honestly so much more information but I cant fit it all in here.
I have a link to much more comprehensive DD.

Alternatively feel free to simply ask a question and I'll do my best to answer it.

To those who think it's too risky to invest in ASTS.
Come back in April, by then testing should be complete and financing secured.

Positions:
85x 2024 25C.
554 Warrants.
0 Commons.