Core Viewpoint - Sidus Space has appointed Lawrence Hollister as the new Chief Business Officer to enhance growth in both commercial and government markets, effective September 15, 2025 [1] Company Summary - Lawrence Hollister brings a strong background in driving revenue growth and scaling operations within the defense and aerospace sectors [1] - The appointment is aimed at executing strategic initiatives to accelerate the company's growth trajectory [1]

Group 1 - Sidus Space, Inc. has announced a public offering of 9,800,000 shares of its Class A common stock at a price of $1.00 per share [1] - The company is positioned as an innovative and agile player in the space and defense technology sector, providing solutions to government, defense, intelligence, and commercial clients globally [1]

CAPE CANAVERAL, Fla.--(BUSINESS WIRE)---- $SIDU #Cielo--Sidus Space, Inc. (Nasdaq: SIDU) ("Sidus" or the "Company"), an innovative, agile space and defense technology company providing flexible, cost-effective solutions to government, defense, intelligence, and commercial companies around the globe, today announced that it intends to offer to sell shares of its Class A common stock (and/or pre-funded warrants ("Pre-Funded Warrants†) in lieu thereof) in a best-efforts public offering. All of the shares of ...

Financial Data and Key Metrics Changes - Total revenue for the first half of 2025 was approximately $1.5 million, a decrease of 24% compared to $2 million in the same period in 2024, reflecting a strategic shift away from legacy contracts towards higher value commercial space-based and AI-driven solutions [31] - Cost of revenue rose to approximately $4.2 million, a 52% increase from $2.7 million in 2024, driven by increased depreciation and supply chain pressures [32] - Gross profit for the period was a loss of $2.7 million compared to a loss of $757,000 in the same period last year, primarily due to increased depreciation and a shift in contract structure [33] - Selling, general and administrative (SG&A) expenses totaled $8.7 million, up from $6.7 million in the prior year, supporting key growth initiatives [34] - Adjusted EBITDA for the first half of 2025 was $8.6 million compared to $5.9 million in the same period last year, reflecting ongoing investment in scaling the platform [35] Business Line Data and Key Metrics Changes - The company successfully launched its third satellite, LIDSYSAT-3, which is expected to generate recurring revenue through data services [7][9] - The Fortis VPX product line is being expanded to meet growing demand across various sectors, including aerospace and defense, with three scalable tiers introduced [11][12] - The transition from development to commercialization is foundational to the company's growth strategy for 2025 [8] Market Data and Key Metrics Changes - The company is positioned to benefit from increased U.S. manufacturing incentives and rising allied defense spending, particularly in Europe [27] - The focus on dual-use technologies aligns with national security priorities, enhancing the company's relevance in the evolving space economy [20][21] Company Strategy and Development Direction - The company aims to build a vertically integrated model that allows for rapid innovation and cost-effective solutions across space, technology, and AI [30] - The strategic focus includes expanding satellite constellations and advancing dual-use technologies for diverse applications [22][23] - The company is committed to a multi-domain strategy that reduces reliance on any single market segment, essential for long-term sustainable growth [41] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by supply chain pressures but remains optimistic about the transition to higher-margin recurring revenue models [32][36] - The company does not expect to turn a profit in 2025 but is building momentum for future growth [42] - The focus remains on innovation and strategic investments to support long-term profitability and operational efficiency [38][39] Other Important Information - The company completed a public offering of 7.1 million shares at a price of $1.05 per share, realizing approximately $6.7 million in net proceeds [38] - The company has approximately 28 patents approved or pending, reinforcing its competitive edge in the market [19] Q&A Session Summary Question: What are the company's expectations for revenue growth in the coming quarters? - Management indicated that the groundwork laid in 2025 positions the company for material revenue growth in the second half of the year, driven by the commercialization of new technologies and expanding customer contracts [26][42] Question: How is the company addressing supply chain challenges? - The company is actively pursuing cost optimizations and operational efficiencies to mitigate the impact of supply chain pressures on manufacturing operations [32][38]

[Second Quarter 2025 Financial Results and Business Update](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results%20and%20Business%20Update) This report details Sidus Space's Q2 2025 financial performance, operational achievements, and strategic business updates [1.1 Introduction and CEO Statement](index=1&type=section&id=1.1%20Introduction%20and%20CEO%20Statement) Sidus Space announced Q2 2025 financial results and a business update, with CEO Carol Craig highlighting disciplined execution, building durable technology assets like LizzieSat-3 and Orlaith™ AI, and a strategic pivot towards commercialization and capital-efficient revenue generation - Sidus Space (NASDAQ: SIDU) is an innovative space and defense technology company[1](index=1&type=chunk) - CEO Carol Craig stated that Q2 focused on disciplined execution and building durable technology assets, including LizzieSat-3 commissioning, a 24/7 Mission Operations Center, Fortis™ VPX, and Orlaith™ AI Ecosystem. The company invested ahead of revenue to build core IP and capability and is now prioritizing commercialization and capital-efficient revenue generation[2](index=2&type=chunk) [1.2 Operational Highlights](index=1&type=section&id=1.2%20Operational%20Highlights) Sidus Space achieved significant operational milestones, including completing LizzieSat-3 ADCS commissioning, fully staffing its 24/7 Mission Operations Center, securing a patent for its Modular Satellite Platform, deploying the Orlaith™ AI system in Asia, and expanding its lunar satellite manufacturing contract with Lonestar Holdings to $120 million [1.2.1 Subsequent Operational Highlights](index=1&type=section&id=1.2.1%20Subsequent%20Operational%20Highlights) Sidus Space completed LizzieSat-3 ADCS commissioning, staffed its Mission Operations Center, secured a satellite platform patent, deployed Orlaith™ AI in Asia, and expanded its Lonestar contract to $120 million - Completed commissioning of the ADCS system on LizzieSat-3 with cutting-edge Autonomous, Machine-Learning-Powered on-board GNC software[5](index=5&type=chunk) - Fully staffed the in-house Mission Operations Center, enabling 24/7 spacecraft monitoring[5](index=5&type=chunk) - Received Notice of Allowance for the Modular Satellite Platform patent, safeguarding adaptable and scalable satellite architecture IP[5](index=5&type=chunk) - Deployed Orlaith™ AI system in Asia, strengthening global AI and analytics offerings[5](index=5&type=chunk) - Amended and extended the lunar satellite manufacturing contract with Lonestar Holdings, increasing the total potential value to **$120 million**[5](index=5&type=chunk) - Designed LizzieLunar™ to address the Moon's unique operational challenges[5](index=5&type=chunk) - Successfully executed a capital raise to fund key technology initiatives, including the dual-use, multi-domain Fortis™ VPX product line[5](index=5&type=chunk) - Appointed Tiffany Norwood, Founder and CEO of Tribetan, to the Board of Directors[5](index=5&type=chunk) [1.3 Financial Highlights (Summary)](index=2&type=section&id=1.3%20Financial%20Highlights%20(Summary)) Sidus Space reported Q2 2025 revenue of $1.3 million, up 36% YoY, driven by a strategic shift from legacy services. However, gross profit declined to a $(1.0) million loss, and net loss increased to $5.6 million, reflecting strategic investments and depreciation. Cash position improved significantly to $3.6 million from $1.4 million a year prior Financial Highlights Summary | Metric | Q2 2025 ($) | Q2 2024 ($) | Change ($) | % Change | | :-------------------- | :---------- | :---------- | :----- | :------- | | Revenue | $1.3 million | $928,000 | +$372,000 | +36% | | Cost of Revenue | $2.3 million | N/A | N/A | +29% | | Gross Profit (Loss) | $(1.0) million | $(841,000) | $(159,000) | -19% | | SG&A Expenses | $4.3 million | $3.1 million | +$1.2 million | +39% | | Adjusted EBITDA (Loss) | $(3.9) million | $(3.2) million | $(0.7) million | -22% | | Net Loss | $(5.6) million | $(4.1) million | $(1.5) million | -37% | - Cash Position: **$3.6 million** as of June 30, 2025, versus **$1.4 million** a year earlier[9](index=9&type=chunk) - Revenue increase reflects a strategic pivot away from legacy services to new commercial models[9](index=9&type=chunk) - Cost of Revenue increase due to increased satellite and software depreciation and higher material and labor costs[9](index=9&type=chunk) - Gross Profit (Loss) due to reduced contribution from legacy high-margin services as the company transitions to higher-value, recurring revenue lines[9](index=9&type=chunk) - SG&A Expenses increase driven by headcount growth, launch rescheduling, and operational scaling[9](index=9&type=chunk) - Net Loss driven by strategic investment and depreciation[9](index=9&type=chunk) [2. Conference Call and Webcast Information](index=2&type=section&id=2.%20Conference%20Call%20and%20Webcast%20Information) Sidus Space hosted a conference call and webcast on August 14, 2025, to discuss its Q2 financial results, with replay and online archive options available for interested parties - Event: Sidus Space Second Quarter Financial Results Conference Call[7](index=7&type=chunk) - Date & Time: Thursday, August 14, 2025, at 5:00 p.m. Eastern Time[7](index=7&type=chunk) - Access: Live call via U.S. Toll-Free (+1-877-269-7751) or International (+1-201-389-0908) numbers, and webcast available at https://viavid.webcasts.com/starthere.jsp?ei=1729391&tp_key=88085fa059[7](index=7&type=chunk) - Replay: Dial-in replay available until Thursday, August 28, 2025, by dialing +1-844-512-2921 (U.S. Toll-Free) or +1-412-317-6671 (International) and entering replay pin number: 13755242[7](index=7&type=chunk) - Archive: An online archive of the webcast will be available for three months following the event at https://investors.sidusspace.com/[8](index=8&type=chunk) [3. About Sidus Space](index=3&type=section&id=3.%20About%20Sidus%20Space) Sidus Space is an innovative space and defense technology company providing flexible, cost-effective solutions including satellite manufacturing, AI-driven data solutions, mission planning, and hardware manufacturing. Headquartered on Florida's Space Coast, the company serves government, defense, intelligence, and commercial sectors globally - Core Business: Innovative space and defense technology company offering flexible, cost-effective solutions[10](index=10&type=chunk) - Offerings include satellite manufacturing and technology integration, AI-driven space-based data solutions, mission planning and management operations, AI/ML products and services, and space and defense hardware manufacturing[10](index=10&type=chunk) - Mission: 'Space Access Reimagined,' committed to rapid innovation, adaptable and cost-effective solutions, and optimization of space system and data collection performance[10](index=10&type=chunk) - Demonstrated space heritage, including manufacturing and operating its own satellite and sensor system, LizzieSat[10](index=10&type=chunk) - Serves government, defense, intelligence, and commercial companies around the globe[10](index=10&type=chunk) - Operates a 35,000-square-foot space manufacturing, assembly, integration, and testing facility on Florida's Space Coast[10](index=10&type=chunk) [Legal and Financial Disclosures](index=3&type=section&id=Legal%20and%20Financial%20Disclosures) This section details forward-looking statement disclaimers and provides reconciliation for non-GAAP financial measures like Adjusted EBITDA [4.1 Forward-Looking Statements](index=3&type=section&id=4.1%20Forward-Looking%20Statements) This section outlines the nature of forward-looking statements within the press release, cautioning that actual results may differ materially due to various factors, including market conditions and risks detailed in SEC filings. The company disclaims any obligation to update these statements - Statements about future expectations, plans, and prospects, or non-historical facts, may constitute 'forward-looking statements' under The Private Securities Litigation Reform Act of 1995[11](index=11&type=chunk) - Actual results may differ materially from those indicated by such forward-looking statements due to various important factors, including market conditions and other factors described in Sidus Space's Annual Report on Form 10-K and other periodic reports filed with the SEC[11](index=11&type=chunk) - Sidus Space, Inc. specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise[11](index=11&type=chunk) [4.2 Non-GAAP Measures and Reconciliation](index=4&type=section&id=4.2%20Non-GAAP%20Measures%20and%20Reconciliation) Sidus Space uses Adjusted EBITDA as a non-GAAP measure to evaluate operating performance and make strategic decisions, providing a comparable metric to peers. The reconciliation shows an Adjusted EBITDA loss of $(3,946,350) for Q2 2025, an increase from $(3,183,847) in Q2 2024, primarily due to increased depreciation, interest, and equity-based compensation - Adjusted EBITDA is used to evaluate operating performance and make strategic decisions, providing a meaningful comparison to peers[12](index=12&type=chunk) - Adjusted EBITDA is defined as net income (GAAP) adjusted for interest expense, depreciation and amortization expense, acquisition deal costs, severance costs, capital market and advisory fees, equity-based compensation, and warrant costs[12](index=12&type=chunk) - Non-GAAP measures should not be considered in isolation or as a substitute for relevant U.S. GAAP measures[12](index=12&type=chunk) Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | % Change | | :-------------------------------- | :--------------- | :--------------- | :------------- | :------- | | Net Income / (Loss) | $(5,625,070) | $(4,136,084) | $(1,488,986) | 36% | | Interest Expense | $334,658 | $249,174 | $85,484 | 34% | | Depreciation and Amortization | $1,132,294 | $605,003 | $527,291 | 87% | | Severance Costs | $27,320 | $17,231 | $10,089 | 59% | | Equity based compensation | $184,448 | $80,829 | $103,618 | 128% | | Total Non-GAAP Adjustments | $1,678,720 | $952,237 | $726,483 | 76% | | Adjusted EBITDA | $(3,946,350) | $(3,183,847) | $(762,503) | 24% | - Increased interest expense due to short-term note payable and an asset-based loan[13](index=13&type=chunk) - Increased depreciation expense in 2025 and 2024 with the launch and deployment of satellite fixed assets and related satellite software, as well as new ERP software capitalization[14](index=14&type=chunk) - Increased equity-based compensation expense due to incentive programs implemented by the Board in 2025[14](index=14&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows for the reporting periods [5.1 Condensed Consolidated Balance Sheets](index=5&type=section&id=5.1%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $29.7 million from $37.7 million at December 31, 2024, primarily due to a significant reduction in cash. Total liabilities increased slightly to $15.4 million, while total stockholders' equity decreased to $14.3 million from $23.5 million Condensed Consolidated Balance Sheet Summary | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | | :-------------------------------- | :-------------- | :---------------- | :------------- | | Total Assets | $29,669,423 | $37,745,567 | $(8,076,144) | | Total Liabilities | $15,355,116 | $14,209,502 | +$1,145,614 | | Total Stockholders' Equity | $14,314,307 | $23,536,065 | $(9,221,758) | - Cash decreased significantly from **$15,703,579** at December 31, 2024, to **$3,634,693** at June 30, 2025[16](index=16&type=chunk) - Property and equipment, net, increased from **$14,891,976** to **$17,179,137**[16](index=16&type=chunk) - Accounts payable and other current liabilities increased from **$3,388,667** to **$5,755,965**[16](index=16&type=chunk) - Asset-based loan liability increased from **$6,902,636** to **$7,881,629**[16](index=16&type=chunk) - Notes payable decreased from **$3,059,767** to **$0**[16](index=16&type=chunk) [5.2 Condensed Consolidated Statements of Operations](index=6&type=section&id=5.2%20Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenue was $1.26 million, up from $0.93 million in Q2 2024. However, cost of revenue increased significantly, leading to a gross loss of $(1.03) million. Selling, general and administrative expenses also rose, resulting in a net loss of $(5.63) million for the quarter, compared to $(4.14) million in Q2 2024 Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------------- | | Total Revenue | $1,261,023 | $927,570 | +$333,453 | | Cost of Revenue | $2,288,165 | $1,768,671 | +$519,494 | | Gross Profit (Loss) | $(1,027,142) | $(841,101) | $(186,041) | | Selling, general and administrative expense | $4,263,269 | $3,056,814 | +$1,206,455 | | Net loss | $(5,625,070) | $(4,136,084) | $(1,488,986) | | Basic and diluted loss per common share | $(0.31) | $(0.99) | +$0.68 | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------------- | | Total Revenue | $1,499,517 | $1,977,725 | $(478,208) | | Cost of Revenue | $4,155,137 | $2,734,762 | +$1,420,375 | | Gross Profit (Loss) | $(2,655,620) | $(757,037) | $(1,898,583) | | Selling, general and administrative expense | $8,707,711 | $6,702,397 | +$2,005,314 | | Net loss | $(12,039,697) | $(7,946,584) | $(4,093,113) | | Basic and diluted loss per common share | $(0.66) | $(2.32) | +$1.66 | - Q2 2025 revenue included **$569,953** from related parties, a significant increase from **$92,772** in Q2 2024[18](index=18&type=chunk) - Basic and diluted loss per common share improved from **$(0.99)** to **$(0.31)** in Q2 2025, despite increased net loss, due to a higher weighted average number of common shares outstanding (**18,320,025** in 2025 vs. **4,181,344** in 2024)[18](index=18&type=chunk) [5.3 Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=5.3%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was $(7.85) million, similar to the prior year. Net cash used in investing activities was $(4.35) million, primarily for property and equipment purchases. Net cash provided by financing activities significantly decreased to $0.13 million from $11.87 million in 2024, leading to a net change in cash of $(12.07) million and an ending cash balance of $3.63 million Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------------- | | Net Cash provided by (used in) Operating Activities | $(7,845,359) | $(7,570,068) | $(275,291) | | Net Cash used in Investing Activities | $(4,354,130) | $(4,067,741) | $(286,389) | | Net Cash provided by (used in) Financing Activities | $130,603 | $11,866,071 | $(11,735,468) | | Net change in cash | $(12,068,886) | $228,262 | $(12,297,148) | | Cash, end of period | $3,634,693 | $1,444,369 | +$2,190,324 | - Net cash used in operating activities was primarily driven by net loss, partially offset by non-cash adjustments like stock-based compensation and depreciation/amortization[20](index=20&type=chunk) - Net cash used in investing activities was primarily for the purchase of property and equipment[20](index=20&type=chunk) - Financing activities in 2025 included proceeds from exercise of warrants (**$2,381,247**) and asset-based loan agreement (**$4,413,239**), largely offset by repayments of asset-based loan (**$3,604,116**) and notes payable (**$3,059,767**)[20](index=20&type=chunk) - Cash paid for interest increased to **$630,874** in 2025 from **$338,116** in 2024[20](index=20&type=chunk) [6. Contacts](index=7&type=section&id=6.%20Contacts) Provides contact information for investor relations and media inquiries for Sidus Space - Investor Relations: investorrelations@sidusspace.com[21](index=21&type=chunk) - Media Inquiries: press@sidusspace.com[21](index=21&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to ___________ Commission File Number: 001-41154 SIDUS SPACE, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 46-0628183 FORM 10-Q (Mark One) 150 N. Syk ...

Market Performance - U.S. stocks traded mostly higher, with the Nasdaq Composite gaining over 50 points on Monday. The Dow increased by 0.07% to 44,932.70, the NASDAQ rose by 0.28% to 21,167.71, and the S&P 500 gained 0.09% to 6,394.33 [1] - Energy shares saw a rise of 0.9%, while materials stocks dipped by 1.1% on the same day [1] Commodity Prices - Oil prices increased by 2.2% to $66.57, while gold prices decreased by 0.9% to $3,306.90. Silver fell by 0.3% to $38.235, and copper dropped by 1% to $5.7285 [5] European Market Trends - European shares were lower, with the eurozone's STOXX 600 slipping by 0.19%. Spain's IBEX 35 Index fell by 0.09%, London's FTSE 100 decreased by 0.57%, Germany's DAX 40 declined by 0.89%, and France's CAC 40 fell by 0.37% [6] Asian Market Trends - Asian markets closed mixed, with Japan's Nikkei 225 falling by 1.10%, Hong Kong's Hang Seng gaining by 0.68%, China's Shanghai Composite rising by 0.12%, and India's BSE Sensex decreasing by 0.70% [7] Company-Specific Movements - CEA Industries Inc. saw its shares surge by 600% to $62.10 following a $500 million private placement announcement [9] - Celcuity Inc. shares increased by 167% to $36.80 after releasing topline results from its Phase 3 VIKTORIA-1 trial [9] - AIM ImmunoTech Inc. shares rose by 41% to $11.82 after announcing mid-year data from its Phase 2 DURIPANC trial [9] - Quhuo Limited shares dropped by 84% to $0.21 after announcing a strategic partnership with NIU World [9] - Adaptimmune Therapeutics plc shares fell by 63% to $0.1271 after agreeing to sell assets related to its cell therapy products for $55 million [9] - Sidus Space, Inc. shares decreased by 44% to $1.1200 following a $7.5 million public offering announcement [9]

Core Insights - VORAGO Technologies has announced a collaboration with Sidus Space to validate and advance its next-generation microcontroller technology through the Alpha Customer Program [1][2][3] Company Overview - VORAGO Technologies specializes in radiation-hardened semiconductor solutions for space, defense, and industrial markets, utilizing proprietary HARDSIL® technology [2][9] - Sidus Space is an innovative company focused on space and defense technology, offering solutions such as satellite manufacturing and AI-driven data solutions [11] Collaboration Details - The partnership aims to accelerate the development and deployment cycles for Sidus' next-generation platforms while providing VORAGO with real-world performance feedback [3][6] - Sidus Space will receive early access to product samples, software support, and direct technical collaboration with VORAGO's engineering team [5][6] Strategic Importance - The Alpha Customer Program is a strategic initiative by VORAGO to engage with industry leaders during early product development stages, ensuring alignment with market needs [4][6] - This collaboration is expected to enhance the resilience of Sidus' platforms in harsh environments and support the strategy to shorten development cycles while increasing performance [6][7] Future Outlook - The project will progress through defined milestones, including joint design reviews and integration efforts, with the goal of entering production next year [5][6] - The collaboration marks the beginning of a strategic effort to deliver advanced radiation-hardened compute solutions for the next era of space infrastructure and exploration [8]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $238,000, a decrease of $812,000 or 77% compared to Q1 2024 revenue of $1,050,000, primarily driven by the timing of fixed price milestone contracts and a shift away from legacy contract work [18] - Cost of revenue for Q1 2025 increased 93% to approximately $1,900,000 compared to Q1 2024, influenced by satellite and software-related depreciation and higher material and labor inputs [18][19] - Gross profit for Q1 2025 was a loss of $1,600,000 compared to a profit of $84,000 in Q1 2024, reflecting increased depreciation and a shift in contract mix [19] - Net loss for Q1 2025 was $6,400,000 compared to a net loss of $3,800,000 in Q1 2024, attributed to depreciation and scaling costs [21] Business Line Data and Key Metrics Changes - The company celebrated the successful launch of LISISAT three, marking a significant step in building a fully operational data-generating micro constellation [5][6] - The transition from development to commercialization is foundational to the company's 2025 growth strategy, with a focus on dual-use applications and multi-domain interoperability [6][10] Market Data and Key Metrics Changes - The company is actively pursuing opportunities related to US manufacturing incentives and increased allied defense spending, particularly in Europe, aligning with its dual-use strategy [15] - Early customer engagements have shown strong interest and encouraging feedback, indicating a positive market reception for new technologies [9] Company Strategy and Development Direction - The company aims to become a vertically integrated, diverse, multi-domain solutions provider, expanding capabilities across air, sea, and terrestrial environments [4][5] - The strategic focus includes the development of the Cytis Forlace AI ecosystem, designed for near real-time autonomous decision-making across various mission types [7][10] - The company is committed to developing breakthrough innovations that meet existing requirements while opening new market opportunities [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory despite the near-term financial impacts of the transformation, emphasizing the importance of the groundwork laid in Q1 for future revenue growth [23][24] - The company is focused on completing satellite commissioning and expanding commercialization of services, with expectations for material revenue growth in the second half of the year [14][23] Other Important Information - The company has a well-established patent portfolio that serves as a strategic asset, providing barriers to entry and enhancing customer confidence in regulated markets [13][14] - The total potential contract value with Lone Star Holdings was amended and extended to $120,000,000, providing strong visibility for future revenue [11][12] Q&A Session Summary Question: What are the expectations for revenue generation in the upcoming quarters? - Management indicated that the groundwork laid in Q1 positions the company to begin realizing material revenue growth in the second half of the year [14][23] Question: How is the company addressing the challenges in the supply chain? - The company is actively pursuing cost optimization and operating efficiencies to support long-term profitability while managing cash conservatively [21][22]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $238,000, a decrease of $812,000 or 77% compared to Q1 2024 revenue of $1,050,000, primarily due to the timing of fixed price milestone contracts and a shift away from legacy contract work [17] - Cost of revenue for Q1 2025 increased 93% to approximately $1,900,000 compared to Q1 2024, driven by satellite and software-related depreciation and higher material and labor inputs [17][18] - Gross profit for Q1 2025 was a loss of $1,600,000 compared to a profit of $84,000 in Q1 2024, reflecting increased depreciation and a shift in contract mix [18] - Net loss for Q1 2025 was $6,400,000 compared to a net loss of $3,800,000 in Q1 2024, attributed to depreciation and scaling costs [20] - Adjusted EBITDA loss for Q1 2025 totaled $4,700,000, a 75% increase in loss compared to $2,700,000 for the same period the prior year [19] Business Line Data and Key Metrics Changes - The company celebrated the successful launch of LISISAT three, marking its third satellite and a step towards building a fully operational data-generating micro constellation [5][6] - The transition from development to commercialization is foundational to the company's 2025 growth strategy, with a focus on dual-use technologies for various mission types [6][8] Market Data and Key Metrics Changes - The company is actively pursuing opportunities related to US manufacturing incentives and increased allied defense spending, particularly in Europe, aligning with its dual-use strategy [14] - Early customer engagements have shown strong interest and encouraging feedback, indicating a positive market response to new product offerings [8] Company Strategy and Development Direction - The company aims to become a vertically integrated, diverse, multi-domain solutions provider, expanding capabilities across air, sea, and terrestrial environments [4][6] - A strategic soft launch of several technologies designed for dual-use applications is underway, with plans to bring multi-domain interoperability to market beginning in 2025 [7][9] - The company is focused on diversifying its technology portfolio and addressable markets, with a commitment to developing breakthrough innovations [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term trajectory despite the near-term financial impacts of the transformation, emphasizing the importance of the groundwork laid in Q1 for future revenue growth [22][23] - The company is positioned to begin realizing material revenue growth in the second half of the year, with a focus on completing satellite commissioning and expanding commercialization [13][22] Other Important Information - The company received a notice of allowance for its modular satellite testing platform patent, reinforcing its vertically integrated model and safeguarding intellectual property [12] - The total potential contract value with Lone Star Holdings was amended and extended to $120,000,000, providing strong visibility for future revenue [10] Q&A Session Summary Question: What are the expectations for revenue growth in the second half of the year? - Management indicated that the groundwork laid in Q1 positions the company to begin realizing material revenue growth in the second half of the year [13][22] Question: How is the company addressing the increased costs in the supply chain? - The company is actively pursuing further cost optimization and operating efficiencies to support long-term profitability [21]