BYTE Acquisition (BYTS) - 2024 Q2 - Quarterly Report

Financial Performance - Net revenues for the three months ended June 30, 2024, increased by $3,631,000 to$6,401,000 compared to $2,770,000 for the same period in 2023, driven by increased product sales [139]. - Gross profit for the three months ended June 30, 2024, increased by 169.3$4,506,000 compared to $1,673,000 for the same period in 2023 [139]. - Operating income for the three months ended June 30, 2024, was$976,000, a significant improvement from a loss of $3,084,000 in the same period in 2023, representing a variance of 131.6$18,462,000 for the three months ended June 30, 2024, compared to a net loss of $3,103,000 for the same period in 2023, reflecting a variance of 695.0$11,267,000 to $16,976,000, a 197.4$5,709,000 for the same period in 2023 [143]. - Gross profit for the six months ended June 30, 2024 was $7,134,000, up 187.9$2,478,000 in 2023 [144]. - Other income for the three months ended June 30, 2024 was $17,486,000, a significant increase from other expense of$19,000 in 2023 [141]. Expenses - Research and development expenses for the three months ended June 30, 2024, increased by $38,000 to$703,000 compared to $665,000 for the same period in 2023 [140]. - Research and development expenses for the six months ended June 30, 2024 increased by$59,000 to $1,398,000 compared to$1,339,000 in 2023 [144]. - Selling, general and administrative expenses for the six months ended June 30, 2024 increased by $237,000 to$6,162,000 compared to $5,925,000 in 2023 [144]. Liabilities and Cash Position - Total liabilities measured at fair value as of June 30, 2024, amounted to$20,389,999, compared to $8,626,779 as of December 31, 2023 [130]. - Net cash used in operating activities for the six months ended June 30, 2024 was$4,147,000, primarily due to a net loss of $13,502,000 [151]. - As of June 30, 2024, the company had cash of approximately$227,000 and accounts receivable of approximately $3,440,000 [150]. - The accumulated deficit as of June 30, 2024 was$30,979,000, with a working capital deficit of approximately $6,712,000 [150]. Business Developments - The merger with BYTS closed on December 21, 2023, with Airship AI Holdings, Inc. becoming the accounting acquiror under the ticker symbol "AISP" [128]. - The company has begun selling AI-based solutions since late 2022, focusing on transitioning data management and analysis workloads to the edge [134]. - The company plans to modify and develop more advanced performance indicators as it grows and increases its product offerings and customer base [132]. Lease Agreements - The company entered into a lease for 15,567 square feet of office and warehouse space in Redmond, WA, starting October 1, 2023, with a monthly payment of$25,000, expiring on October 31, 2027, and a 3% increase in payment each year thereafter [157]. - A lease extension was made for 3,621 square feet in Moorestown, North Carolina, with a net monthly payment of $6,488, expiring on August 29, 2024 [157]. Accounting Policies - The company does not have any off-balance sheet arrangements that could materially affect its financial condition, revenue, or expenses [158]. - The consolidated financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions that may differ from actual results due to economic uncertainties [159]. - Significant accounting policies have not materially changed from those discussed in the Annual Report for the year ended December 31, 2023 [160].