AST SpaceMobile Inc ( ASTS ) shares are trading higher in after hours Wednesday following the company announcement that it secured an initial contract with the Space Development Agency as a prime government contractor.

What To Know: AST SpaceMobile ( ASTS ) said it was selected by the Space Development Agency to compete for upcoming prototype demonstration projects under the Hybrid Acquisition for proliferated Low-earth Orbit (HALO) program.

The company entered into an Other Transaction (OT) agreement and will now have the opportunity to compete directly as a prime contractor to the U.S. government for specific prototype orders.

“This initial contract validates our commitment to developing innovative solutions for national security space needs,” said Chris Ivory, AST SpaceMobile’s chief commercial officer and head of its Government Business unit.

“Our space-based cellular broadband technology has the potential to enhance SDA’s stated mission at the transport, tracking, and ground layers in a secure and reliable way.”

See Also: SpaceX CEO Elon Musk Slams Overregulation In Space Travel As He Campaigns For Trump: ‘If Starship Did Hit A Whale, Honestly, It’s Like The Whale Had It Coming’

AST SpaceMobile ( ASTS ) shares are up more than 400% since the start of the year. The stock started taking off in May after the company announced a definitive commercial agreement with AT&T to provide a space-based broadband network direct to everyday cell phones. Last month, AST SpaceMobile ( ASTS ) announced it launched its first five commercial satellites designed to reach standard smartphones.

ASTS Price Action: AST SpaceMobile shares were up 3.54% in after hours, trading at $27.19 at the time of publication Wednesday, according to Benzinga Pro.