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]