Unlike other tradable businesses engaged in the "space race," AST SpaceMobile (ASTS 8.12%) doesn't send celebrities into orbit. Rather, it's a company with an ambitious vision: to bring 5G network connectivity directly to regular smartphones around the world through an in-orbit satellite network. (Hint: That includes remote, hard-to-reach places).

It's a worthy cause, but even the noblest of goals is hard to reach without capital. AST SpaceMobile, as we'll see, is achieving operational milestones, but may lack the fiscal resources to persist as a going concern. The company's current approach to capitalization, it seems, should provide immediate-term financial relief. However, it doesn't look like a viable long-term solution. 

With that said, let's take a deeper look at what's going on with the company to determine the best investment approach moving forward.

One small step for AST SpaceMobile

Before dissecting AST SpaceMobile's fiscal issues, it's worth noting that the company is making operational progress. In mid-November, for instance, AST SpaceMobile successfully launched test satellite Blue Walker 3 into orbit. This event, according to the company, marked the "largest-ever commercial communications array deployed in low Earth orbit."

It's easy to be awed by this apparently historic event, wherein the fully unfolded Blue Walker 3 spanned 693 square feet. AST SpaceMobile anticipates this satellite's field of view to span more than 300,000 square miles on the Earth's surface and to communicate directly with cellphones at 5G speeds.

If all goes according to plan, AST SpaceMobile will build five Block 1 BlueBird satellites and launch them in late 2023. Thus, the company will hopefully graduate from individual satellite launches to constellations of satellites in a year's time.

Its balance sheet could inhibit future projects

Congratulations are certainly in order as AST SpaceMobile marks a milestone moment with Blue Walker 3's deployment. But, while the company eyes its multiple-satellite deployment next year, investors should ask questions about whether it has sufficient capitalization.

It's awfully difficult to have one's dreams take flight when the fiscal figures bring you right back to earth. Alarmingly, AST SpaceMobile's balance of cash and cash equivalents dwindled from $321.79 million at the end of 2021 to $198.87 million at the end of 2022's third quarter. 

That's not a stellar stat, but there is a shining star in AST SpaceMobile's most recent quarterly data release. Specifically, the company improved its revenue from $2.45 million in the year-earlier quarter to $4.17 million in Q3 2022. That's encouraging, but it doesn't overshadow AST SpaceMobile's swing from $4.12 million in net income to a $9.77 million net loss during that time frame. The culprit was an across-the-board operating expenses ramp-up from engineering to research and development, as well as the catch-all "general and administrative costs."

Not an ideal way to fill the coffers with cash

Thus, prospective investors should monitor AST SpaceMobile closely to see if it enacts some cost-cutting measures in the current and future quarters. Hopefully, any retrenchment efforts won't delay the proposed launch-time window for the Block 1 BlueBird satellites.

Unfortunately, not much has been heard lately from AST SpaceMobile's management regarding retrenchment strategies. The company did, however, proudly tout a capital inflow to the tune of $75 million -- though this isn't "free" money by any means.

Ideally, AST SpaceMobile would earn capital by selling more products and services, and by reducing expenditures (a penny saved is a penny earned, after all). As it turns out, the company is raising $75 million in gross proceeds by selling over 13 million of its shares. AST SpaceMobile CFO Sean Wallace personally welcomed all of the company's new stockholders, but the folks who had already held shares might not be in such a welcoming mood at the moment.

If filling in fiscal potholes were as easy and consequence-free as printing up millions of shares, every tradable company would do this, and there would be no more financial shortfalls. Real life doesn't work that way, of course, and share dilution could remain a concern for AST SpaceMobile's stockholders, especially if the printing-and-spending tactic becomes a habit rather than an isolated incident.

The main takeaway for prospective investors, then, is that AST SpaceMobile is a company to watch closely -- but by that, I mean with extreme caution. Until the company's management gets serious about cutting costs and returning AST SpaceMobile to a profitable profile, there's little here for shareholders except for perhaps an all-or-nothing asset that warrants a small position at most.