Q2 2024 Sidus Space Inc Earnings Call

Speaker Change: [music].

Yeah.

Operator: Greetings and welcome to the Sidus Space second quarter 2024 results and business update. At this time, all participants are in a listen-only mode.

Operator: Greetings and welcome to the Sidus Space second quarter 2024 results and business update.

Speaker Change: Greetings and welcome to Society space second quarter, 2024 results and business update at this time all participants are in a listen only mode.

Operator: At this time, all participants are in a listen-only mode.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone. It is now my pleasure to introduce your host, Bill White, the CFO. Thank you.

Operator: A question-and-answer session will follow the formal presentation.

Speaker Change: Question and answer session will follow the formal presentation, if anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Operator: If anyone should require operator assistance during the conference, please press star zero, on your telephone keypad.

Operator: It is now my pleasure to introduce your host, Bill White, the CFO.

Speaker Change: My pleasure to introduce your host Bill White and CFO you may begin.

Operator: Thank you.

Bill White: You may begin. Good evening, everyone, and thank you for joining us for Sidus Space's second quarter 2024 earnings conference call. Joining us today from the company is Carol Craig, our Chairman and Chief Executive Officer, and myself, Bill White, Chief Financial Officer. During today's call, we make certain forward-looking states. These statements are based on current expectations and assumptions, and as a result, are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the forward-looking statements made on this call.

Operator: You may begin.

Bill White: Good evening, everyone, and thank you for joining us for Sidus Space's second quarter

Bill White: These factors include our ability to estimate operational expenses and liquidity needs, customer demand, supply chain delays, including launch providers, and extended sales cycles. For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www.siduspace.com. Listeners are cautioned not to put any undue reliance on forward-looking statements, and the company specifically disclaims any obligations to update the forward-looking statements that may be discussed during this call. At this time, I'd like to turn the call over to Carol Craig. Carol, please go ahead.

Speaker Change: Good evening, everyone and thank you for joining us for <unk> second quarter 2024 earnings conference call joining.

Bill White: 2024 earnings conference call.

Bill White: Joining us today from the company is Carol Craig, our Chairman and Chief Executive Officer, and myself, Bill White, Chief Financial Officer.

Speaker Change: Joining us today from the company as Carol Craig, Our Chairman and Chief Executive Officer, and myself, Bill White Chief Financial Officer.

Bill White: During today's call, we make certain forward-looking statements. These statements are based on current expectations and assumptions, and as a result, are subject, to risks and uncertainties. Many factors could cause actual results to differ materially from the forward-looking, statements made on this call. These factors include our ability to estimate operational expenses and liquidity needs, our demand supply chain delays, including launch providers, and extended sales cycles.

Speaker Change: During today's call, we make certain forward looking statements.

Speaker Change: These statements are based on current expectations and assumptions and as a result are subject to risks and uncertainties. Many factors could cause actual results to differ materially from the forward looking statements made on this call.

Speaker Change: These factors include our ability to estimate operational expenses and liquidity needs customer demand supply chain delays, including launch providers and extended sales cycles.

Bill White: For more information about these risks and uncertainties, please refer to the risk factors, in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www.sidusspace.com.

Speaker Change: For more information about these risks and uncertainties. Please refer to the risk factors in the company's filings with Securities and Exchange Commission each of which can be found on our website www dot cited space Dot com.

Speaker Change: Listeners are cautioned not to put any undue reliance on forward looking statements and the company specifically disclaims any obligations to update the forward looking statements that may be discussed during this call.

Bill White: Listeners are cautioned not to put any undue reliance on forward-looking statements, and, the company specifically disclaims any obligations to update the forward-looking statements that may be discussed during this call.

Bill White: At this time, I'd like to turn the call over to Carol Craig.

Speaker Change: At this time I'd like to turn the call over to Carol Great. Harold. Please go ahead.

Carol Craig: Carol, please go ahead.

Carol Craig: Thank you, Bill, and welcome, everyone.

Carol Craig: For those of you who may be new to our company and our mission, SIDUSPACE is a provider of, comprehensive space infrastructure solutions that include space-based data-as-a-service on our proprietary on-orbit satellite platform. We are U.S.-founded and based in Cape Canaveral, Florida, near Kennedy Space Center, where, we operate from a 35,000-square-foot manufacturing facility.

Carol Craig: Thank you, Bill, and welcome, everyone. For those of you who may be new to our company and our mission, Sidus Space is a provider of comprehensive space infrastructure solutions that include space-based data as a service on our proprietary on-orbit satellite platform. We are U.S. founded and based in Cape Canaveral, Florida, near Kennedy Space Center, where we operate from a 35,000-square-foot manufacturing facility. We support space manufacturing for other companies while also managing our expanding constellation focused on AI-enabled data as a service. Our Mission Control Center is located in Merritt Island, Florida, also part of the Space Coast.

Carol Great: Thank you Bill and welcome everyone.

Carol Great: For those who maybe new to our company and our mission side of space as a provider of comprehensive infrastructure solutions that include space based data as a service on a proprietary on orbit satellite platform.

Speaker Change: We are U S found it and based in Cape Canaveral, Florida near Kennedy Space Center, where we operate in about 35000 square foot manufacturing facility.

Carol Craig: We support space manufacturing for other companies while also managing our expanding constellation, focused on AI-enabled data-as-a-service.

Speaker Change: We support space manufacturing for other companies, while also managing our expanding constellation focused on AI enabled data as a service.

Carol Craig: Our Mission Control Center is located in Merritt Island, Florida, also part of the Space Coast.

Speaker Change: Our mission control centers located in Merit out of Florida also part of the space Coast.

Carol Craig: As the space economy evolves from a niche sector to a mainstream industry, it's generating value across various fields and addressing global challenges such as military support, space exploration, and climate change. The impact of space in the satellite industry is becoming increasingly recognized, driving a growing demand for space-derived data and solutions. What sets us apart is our holistic approach to addressing our client's most pressing challenges.

Carol Craig: As the space economy evolves from a niche sector to a mainstream industry, it's generating, value across various fields and addressing global challenges such as military support, space exploration, and climate change.

Speaker Change: As the state's economy evolves from a niche sector to a mainstream industry, it's generating value across various field in addressing global challenges such as military support.

Speaker Change: Exploration and climate change.

Carol Craig: The impact of space in the satellite industry is becoming increasingly recognized, driving, a growing demand for space-derived data and solutions.

Speaker Change: In fact, the space in the satellite industry is becoming increasingly recognized driving and growing demand for space derived data and solution.

Carol Craig: What sets us apart is our holistic approach to addressing our clients' most pressing challenges.

Speaker Change: What sets us apart is our holistic approach to addressing our clients' most pressing challenges.

Carol Craig: We offer cost-effective solutions with deep expertise across the entire space life cycle, from hardware manufacturing to space-based data delivery and mission planning and operations. Unlike other constellation operators who focus on a single business line, such as Pacific Earth Observation Sensors, or particular customer segments like the Department of Defense, we have the benefit of optionality. We're not dependent on a single line of business or customer. This diversity mitigates risks associated with external factors like macroeconomic shifts or technological disruptions.

Carol Craig: We offer cost-effective solutions with deep expertise across the entire space lifecycle, from hardware manufacturing to space-based data delivery and mission planning and operations.

We offer cost effective solutions with deep expertise across the entire space lifecycle from hardware manufacturing space. They stayed as delivery and mission planning and operations.

Speaker Change: Unlike other constellation operators, who focus on a single business line, such as specific Earth observation sensors or particular customer segments like the department of defense, we have the benefit of Optionality, we're not dependent on a single line of business or customer list.

Carol Craig: Unlike other constellation operators who focus on a single business line, such as Pacific, Earth Observation Sensors or particular customer segments like the Department of Defense, we have the benefit of optionality.

Carol Craig: We're not dependent on a single line of business or customer. This diversity mitigates risks associated with external factors like macroeconomic shifts, or technological disruptions.

Speaker Change: This diversity mitigates risks associated with external factors like macroeconomic shifts or technological disruption.

Carol Craig: Our flexibility allows us to adapt quickly to market changes, supporting growth across all our business lines. We're currently generating revenue and have been for well over a decade and are growing our pipeline across all our businesses. The hard work of the last couple of years has led us into a period of tremendous activity and excitement for Sidus Space. In March, we achieved a significant milestone with our first launch success of our LISISAT-1.

Carol Craig: Our flexibility allows us to adapt quickly to market changes, supporting growth across, all our business lines.

Speaker Change: Our flexibility allows us to adapt quickly to market changes supporting growth across all our business lines.

Carol Craig: We're currently generating revenue and have been for well over a decade and are growing, our pipeline across all our businesses. The hard work of the last couple of years has led us into a period of tremendous activity, and excitement for Sidus Space. In March, we achieved a significant milestone with our first launch success of our Lizzie, Satwine. Our technology is now proven, patented, and validated, and we're moving forward, executing, our vision and expanding our full-stack space business.

Speaker Change: We're currently generating revenue and have been for well over a decade and are growing our pipeline across all our businesses.

Speaker Change: The hard work of the last couple of years has led us into a period of tremendous activity and excitement for cider space.

Speaker Change: In March we achieved a significant milestone with our first launch success of our living at that one our technology is now proven patented and validated and we're moving forward with executing our vision and expanding our full stack space business.

Carol Craig: Our technology is now proven, patented, and validated, and we're moving forward executing our vision and expanding our full-stack space business. We had an outstanding start to 2024, and I'm pleased to report that operationally and technically, we've had another milestone quarter as we continue the positive momentum from LZSAT-1's successful deployment via SpaceX's Transporter 10 rideshare mission. LZSAT-1 has performed very well in its first five months in orbit, meeting mission objectives and activating sensors.

Carol Craig: We had an outstanding start to 2024, and I'm pleased to report that operationally, and technically, we've had another milestone quarter as we continue the positive momentum from Lizzie Satwine's successful deployment via SpaceX Transporter 10 rideshare mission. Lizzie Satwine has performed very well in its first five months in orbit, meeting mission, objectives and activating sensors. Notably, we believe Lizzie Satwine is the first of its kind hybrid 3D-printed, AI-enhanced, multi-mission satellite and remains unique in its technology and multi-purpose capabilities.

Speaker Change: We had an outstanding start to 2024 and I'm pleased to report that operationally and technically we've had another milestone quarter as we continue the positive momentum from Lindsay if that one successful deployment.

That's transported 10 Rideshare mission.

Speaker Change: That one has performed very well in its first five months in orbit meeting mission objectives and activating centers.

Carol Craig: Notably, we believe LIVXAT-1 is the first of its kind hybrid 3D-printed AI-enhanced multi-mission satellite and remains unique in its technology and multi-purpose capabilities. It lays a solid foundation for future growth as we continue with plans to expand our constellation. MoviFat 2 and 3 are in final stages of production, and as of today, everything is on track and moving according to the latest schedule, which is dependent on launch dates.

Speaker Change: Notably we believe let's hit that one is the first of its kind hybrid three D printed AI enhanced multi mission satellite and remains unique in the technology and multipurpose capabilities.

Carol Craig: It lays a solid foundation for future growth as we continue with plans to expand our constellation.

Speaker Change: Lays a solid foundation for future growth as we continue with plans to expand our constellation.

Carol Craig: Lizzie Satwine 2 and 3 are in final stages of production, and as of today, everything, is on track and moving according to the latest schedule, which is dependent on launch dates. We're on target for two launches in the next six to nine months, with the first currently, manifested for the fourth quarter of this year with SpaceX. Of course, launch schedule is subject to many factors, including several outside of our control. In the space industry, delays are common and do not necessarily indicate issues. Some delays are completely out of our control, like launch provider schedule changes.

Speaker Change: So we think that two and three are in final stages of production and as of today everything is on track and moving according to the latest schedule, which is dependent on launch dates.

Carol Craig: We are on target for 2 launches in the next 6 to 9 months, with the first currently manifested for the 4th quarter of this year with SpaceX. Of course, launch schedule is subject to many factors, including several outside of our control. In the space industry, delays are common and do not necessarily indicate issues. Some delays are completely out of our control, like launch provider schedule changes.

Speaker Change: Target for two launches in the next six to nine months with the first currently manifest in for the fourth quarter of this year with Spacex.

Of course launch schedule is subject to many factors, including several outside of our control.

Speaker Change: The space industry and delays are common and do not necessarily indicate issues. Some delays are completely out of our control like launch provider scheduled changes as we continue to build and launch our constellation we expect to make changes to the schedule launches and technologies driven by market and customer needs.

Carol Craig: As we continue to build and launch our constellation, we expect to make changes to schedules, launches, and technologies as driven by market and customer needs. Sometimes a business case supports a strategic schedule change like an opportunity to integrate an advanced technology or customer payload. As a reminder, our satellites have an expected lifespan of about five years and consideration is always given to maximize return on investment and drive shareholder value for the life of the satellite. Weighing in at around 225 pounds, LZSAT is a more advanced and versatile satellite compared to typical CubeSats, which are of smaller size and weight.

Carol Craig: As we continue to build and launch our constellation, we expect to make changes to schedules, launches, and technologies as driven by market and customer needs. Sometimes, a business case supports a strategic schedule change like an opportunity to integrate, an advanced technology or customer payload.

Speaker Change: Sometimes a business case support the strategic schedule change like an opportunity to integrate and advanced technology or customer payload.

Carol Craig: As a reminder, our satellites have an expected lifespan of about five years, and consideration, is always given to maximize return on investment and drive shareholder value for the life of the satellite.

Speaker Change: As a reminder, our satellites have unexpected lifespan of about five years and consideration is always given to maximize return on investment and drive shareholder value for the life of the satellite.

Carol Craig: Weighing in at around 225 pounds, Lizzie Sat is a more advanced and versatile satellite, compared to typical CubeSats, which are of smaller size and weight. Our larger size Lizzie Sat supports a range of missions and applications, allowing for, simultaneous multi-sensor data collection. This design optimizes payload capacity and mission flexibility, supporting various customers, and industries with a single, cost-effective satellite.

Well hang it around 225 pounds, let's use that as a more advanced and versatile satellite compared to typical keeps that switch are of smaller size and weight are larger sized living that supports a range of missions and application, allowing for simultaneous multi sensor data collection.

Carol Craig: Our larger size LZSAT supports a range of missions and applications, allowing for simultaneous multi-sensor data collection. This design optimizes payload capacity and mission flexibility, supporting various customers and industries with a single, cost-effective satellite. Our focus on diversity from the start has been integral to our strategy.

Speaker Change: This design Optimizes payload capacity and mission flexibility supporting various customers and industry with a single cost effective satellite.

Carol Craig: Our focus on diversity from the start has been integral to our strategy.

Speaker Change: Our focus on diversity from the start has been integral to our strategy.

Carol Craig: Looking back on what we've accomplished since the start of Q2, there are a lot of firsts for SIDUS, our customers, and space in general. In addition to launching and deploying the first 3D-printed AI-enhanced multi-mission satellite, this past quarter we successfully completed a mission contracted by NASA for an on-orbit demonstration of an autonomous systems hardware-software payload developed at NASA Stennis. This marks the first time NASA Stennis has ever flown a hardware-software payload into space, recognized as a historic milestone by the NASA Stennis Center Director.

Speaker Change: Looking back on what we've accomplished since the start of Q2, there are a lot of her her side of our customers and space in general.

Carol Craig: Looking back on what we've accomplished since the start of Q2, there were a lot of firsts, beside us, our customers, and space in general. In addition to launching and deploying the first 3D-printed AI-enhanced multi-mission, satellite, this past quarter, we successfully completed a mission contracted by NASA for an on-orbit demonstration of an autonomous systems hardware-software payload developed at NASA Stennis.

Speaker Change: In addition to launching in deploying the first three D printed AI enhanced multi mission satellite this past quarter. We successfully completed the mission contracted by NASA for and on orbit demonstration of an autonomous systems hardware software payload developed at NASA Stennis.

Carol Craig: This marks the first time NASA Stennis has ever flown a hardware-software payload into, space, recognized as a historic milestone by the NASA Stennis Center Director. We were contracted by NASA to not only integrate and fly the technology and software, but to, handle launch and satellite activation and onboard data collection.

Speaker Change: This marks the first time naphtha than ever flown a hardware software payload in this space recognized as a historic milestone by the naphtha status Center director.

Carol Craig: We were contracted by NASA to not only integrate and fly the technology and software, but to handle launch and satellite activation and onboard data collection. Another first relates to our high-performance artificial intelligence delivery platform, Featheredge. AI in Space simplifies data analysis by running algorithms directly on our satellites, reducing identification time from hours to seconds.

We were contracted by NASA to not only integrate and fly the technology and software, but to handle launch and satellite activation and onboard data collection.

Speaker Change: Another first relates to our high performance artificial intelligence delivery platform Featheredge.

Carol Craig: This report first relates to our high-performance artificial intelligence delivery platform, FeatherEdge.

Carol Craig: AI in Space simplifies data analysis by running algorithms directly on our satellites, reducing, identification time from hours to seconds. The LISISAT-1 mission demonstrated FeatherEdge's ability to upload new algorithms post-launch, run a machine vision algorithm on the hardware accelerator capable of processing data 300 times faster than a CPU, and to downlink health and status data to our Sidus Mission Control, Center in Maryland, Florida.

Hey, I am say simplifying data analysis by running algorithms directly on our satellites, reducing identification time from hours the seconds.

Carol Craig: The LISISAT-1 mission demonstrated FeatherEdge's ability to upload new algorithms post-launch, run a machine vision algorithm on the hardware accelerator capable of processing data 300 times faster than a CPU, and to downlink health and status data to our Sidus Mission Control Center in Maryland, Florida. Our Google powered AI processor sets the groundwork for substantial upgrades on future launches, which is expected to include NVIDIA powered AI accelerators with 25 times more computing power than our previous version of Feather Edge, resulting in what we believe will be the highest performance edge computing capability on orbit. The term edge computing is often used to describe a distributed computing system where data processing occurs close to where the data is generated.

Speaker Change: So, let's see if that one mission demonstrated further edge is the ability to upload new algorithms post launch running machine vision algorithm on the hardware accelerator capable of processing data 300 times faster than the CPU and to downlink health and status state it to our side its mission control Center in Maryland, and Florida.

Carol Craig: Our Google-powered AI processor sets the groundwork for substantial upgrades on future launches, which is expected to include NVIDIA-powered AI accelerators with 25 times more computing power than our previous version of FeatherEdge, resulting in what we believe will be the highest performance edge computing capability on orbit. The term edge computing is often used to describe a distributed computing system where data, processing occurs close to where the data is generated. This reduces the time to receive data and allows for near real-time data analysis, which, is essential to providing the building blocks for data center-scale computing on orbit.

Speaker Change: Our Google powered AI processor set the groundwork for substantial upgrades and feature launches, which is expected to include Nvidia powered AI accelerators with 25 times more computing power than our previous version a better edge, resulting in what we believe will be the highest performance edge computing capability on orbit.

Carol Craig: So what does all that mean?

The term edge computing is often used to describe its distributed computing system, where data processing, a curse close to where the data is generated this reduces the time to receive data and allows for near real time data analysis, which is essential to providing the building blocks towards data center scale computing on orbit.

Carol Craig: This reduces the time to receive data and allows for near real time data analysis, which is essential to providing the building blocks for data center scale computing on orbit. So what does all that mean? Well, one, Sidus can successfully run high-performance computers in space. These computers can be scaled and swapped incredibly fast on the order of weeks, not years, to adapt to customer or market demands for hardware. Two, we have a system flexible enough to support new customer missions post-launch through software and algorithm updates, which allows Sidus to generate additional revenue on Lizzie sets that have already been launched.

Speaker Change: So what does all that mean, well one sided to successfully run high performance computers in faith based.

Carol Craig: Well, one, Sidus can successfully run high-performance computers in space.

Carol Craig: These computers can be scaled and swapped incredibly fast on the order of weeks, not, years, to adapt to customer and market demands for hardware.

Speaker Change: These computers can be scaled and swapped incredibly fast on the order of weeks not years to adapt to customer and market demand for hardware.

Carol Craig: Two, we have a system flexible enough to support new customer missions post-launch through, software and algorithm updates, which allows Sidus to generate additional revenue on LISI sets that have already been launched.

Speaker Change: We have a system flexible enough to support new customer missions post launch their software and algorithm update which allows scientists to generate additional revenue analytics that that have already been launched.

Carol Craig: And three, the FeatherEdge technology is now providing traction in growth markets such as rapid fire detection. We demonstrated AI-enhanced identification of fires on orbit using Sidus-developed algorithms. Unlike traditional methods, which rely on infrared sensors to collect data and downlink it to the ground for processing, our FeatherEdge solution supports advanced algorithms trained on representative imagery to deliver market-leading accuracy and reliability in thermal data acquisition and analysis, of significance is that our algorithm was 98% accurate and took 5 milliseconds to process the image.

Carol Craig: And three, the FeatherEdge technology is now providing traction in growth markets such, as rapid fire detection.

Speaker Change: And three the Featheredge technology is now providing traction in growth markets such as rapid fire detection, we demonstrated AI enhanced identification of fires on orbit using situs developed algorithms. Unlike traditional methods, which rely on infrared sensors to collect data and down link it to the ground for processing, our featheredge solution supports advanced.

Carol Craig: We demonstrated AI enhanced identification of fires on orbit using Sidus-developed algorithms.

Carol Craig: Unlike traditional methods, which rely on infrared sensors to collect data and downlink, it to the ground for processing, our FeatherEdge solution supports advanced algorithms trained on representative imagery to deliver market-leading accuracy and reliability in thermal data acquisition and analysis. Of significance is that our algorithm was 98 percent accurate and took five milliseconds, to process the image.

Speaker Change: There have been trained on representative imagery to deliver market, leading accuracy and reliability and thermal data acquisition and analysis.

Speaker Change: So significant is that our algorithm was 98% accurate and took five milliseconds the process damage.

Carol Craig: Our full-stack approach to space-based services, vertically integrating, manufacturing and operation of all spacecraft systems, including artificial intelligence, enables us to provide what we believe is the most competitive space-based computing solution on the market. As we've always said, we're not only focused on lower Earth orbit, but also the moon, Mars, and beyond. The moon provides an opportunity to build an infrastructure that enables human permanence on the moon and a transition to commercial operations past lower Earth orbit and on to more distant destinations.

Carol Craig: Our full-stack approach to space-based services, vertically integrating, manufacturing, and, operation of all spacecraft systems, including artificial intelligence, enables us to provide what we believe is the most competitive space-based computing solution on the market.

Speaker Change: Our full stack approach the space based services vertically integrating manufacturing and operation of all spacecraft systems, including artificial intelligence <unk>.

Speaker Change: It was asked to provide what we believe is the most competitive space based computing solution on the market.

Carol Craig: As we've always said, we're not only focused on lower Earth orbit, but also the moon, Mars, and beyond. The moon provides an opportunity to build an infrastructure that enables human permanence, on the moon and a transition to commercial operations past lower Earth orbit and onto more distant destinations.

Speaker Change: As we've always said, we're not only focused on lower Earth orbit, but also the moon Mars and beyond the.

Speaker Change: The Moon provides an opportunity to build an infrastructure that enables human permanents on the moon and a transition to commercial operations pass lower earth orbit and onto more distant destinations.

Carol Craig: Our research and development team has been working on expanding our offerings to include geostationary and lunar satellites. Over the next several months, we expect to see a ramp up in our support of cislunar and lunar needs. We've previously announced that we are a part of NASA's Lunar Terrain Vehicle Services Award as a partner to Intuitive Machines, which involves heavier cargo delivery and moon surface systems development and operations. This contract represents the first phase of developing a crewed rover for human exploration of the moon's surface.

Carol Craig: Our research and development team has been working on expanding our offerings to include, geostationary and lunar satellites.

Speaker Change: Our research and development team has been working on expanding our offerings to include geostationary satellites over the next several months, we expect to see a ramp up in our support of cislunar and lunar needs.

Carol Craig: Over the next several months, we expect to see a ramp-up in our support of cislunar and, lunar needs. We've previously announced that we are part of NASA's Lunar Terrain Vehicle Services Award, as a partner to Intuitive Machines, which involves heavier cargo delivery and moon surface systems development and operations.

Speaker Change: We previously announced that we are a part of Nasa's lunar terrain vehicle services award as a partner to intuitive machines, which involves heavier cargo delivery and moon surface systems development and operations. This contract represents the first phase of developing a crude rover for human exploration of the moon surface in.

Carol Craig: This contract represents the first phase of developing a crew rover for human exploration, of the moon's surface.

Carol Craig: In addition to supporting other partners with lunar solutions, we've also designed a version of LISISAT to meet the needs of lunar missions and the needs of our expanding customer base. So, what does our future look like?

Carol Craig: In addition to supporting other partners with lunar solutions, we've also designed a version, of LZSAT to meet the needs of lunar missions and the needs of our expanding customer base.

Speaker Change: In addition to supporting other partners with lunar solutions. We've also designed a version of what it is that to meet the needs of lunar missions and the need that our expanding customer base.

Carol Craig: So what does our future look like?

Speaker Change: So what does that future look like well to begin with interest in our satellite manufacturing data offerings and long term partnerships continues to grow, especially following our successful launch and our revenue pipeline supports a strong growth outlook.

Carol Craig: Well, to begin with, interest in our satellite manufacturing, data offerings, and long-term, partnerships continues to grow, especially following our successful launch, and our revenue pipeline supports a strong growth outlook. Our proven ability to design, build, launch, and operate 120-kilogram satellites is the, obvious catalyst to the growth of our pipeline.

Carol Craig: Well, to begin with, interest in our satellite manufacturing, data offerings, and long-term partnerships continues to grow, especially following our successful launch. And our revenue pipeline supports a strong growth outlook. Our proven ability to design, build, launch, and operate 120-kilogram satellites is the obvious catalyst to the growth of our pipeline. Over the last few months, we submitted a range of proposals and responses to solicitations to government and commercial customers. These proposals are under evaluation, and we expect to receive the results of contract decisions in the next coming weeks and months.

<unk> ability to design build launch and operate 120 kilogram satellite is the obvious catalyst to the growth of our pipeline over the last few months, we submitted a range of proposals and responses to felicitations to government and commercial customers.

Carol Craig: Over the last few months, we've submitted a range of proposals and responses to solicitations, to government and commercial customers. These proposals are under evaluation, and we expect to receive the results of contract, decisions in the next coming weeks and months.

Speaker Change: Puzzles are undervaluation, and we expect to receive the results of contract decisions in the next coming weeks and months.

Carol Craig: We continue to grow our backlog and contract values and currently have approximately 100, million in our pipeline. We have over 30 active customers in multiple divisions, several of whom are long-term, recurring customers, and we continue to add new customers as we add more capabilities and services.

Carol Craig: We continue to grow our backlog and contract values and currently have approximately 100 million in our pipeline. We have over 30 active customers in multiple divisions, several of whom are long-term recurring customers, and we continue to add new customers as we add more capabilities and services. Additionally, I'm excited as we look to advance discussions with new strategic partners, especially our global partners. In the second quarter, we signed an MOU with NAMACIS Bahrain with plans to establish Sidus Arabia, a joint venture headquartered in Saudi Arabia, to develop a satellite manufacturing facility and pursue joint initiatives. This partnership represents a framework that we will look to replicate in other global areas seeking remote sensing capabilities for environmental and security solutions.

Speaker Change: We continue to grow our backlog and contract values and currently have approximately $100 million in our pipeline.

We have over 30 active customers in multiple divisions, several of whom are long term recurring customers and we continue to add new customers as we add more capabilities and services.

Carol Craig: Additionally, I'm excited as we look to advance discussions with new strategic partners, especially our global partners.

Speaker Change: Additionally, I'm excited as we look to advance discussions with new strategic partners, especially our global partners.

Carol Craig: In the second quarter, we signed an MOU with Nemesis Bahrain with plans to establish Sidus, Arabia, a joint venture headquartered in Saudi Arabia, to develop a satellite manufacturing facility and pursue joint initiatives.

Speaker Change: In the second quarter, we signed an Mou with nemesis, Bahrain with plans to establish situs Arabia joint venture headquartered inside Saudi Arabia, and develop a satellite manufacturing facility and pursue joint initiatives.

Carol Craig: This partnership represents a framework that we will look to replicate in other global, areas, seeking remote sensing capabilities for environmental and security solutions.

Speaker Change: Partnership represents a framework that we will look to replicate in other global areas speaking remote sensing capabilities for environmental and security solution.

Carol Craig: As we continue to update our satellite designs with the latest technologies, we're also, growing our own space product division.

Carol Craig: As we continue to update our satellite design to the latest technologies, we're also growing our own space product division. As a vertically-integrated satellite manufacturer, we have the advantage of being able to design and build our own subsystem solutions for the space ecosystem if it makes economic sense. This drives our cost advantage and our flexible approach to manufacturing. Over the last six months, we invested in our next generation satellite design, which includes more powerful technological solutions, including a VPX open architecture system with simplified assembly and integration, reduced mass, and better performance. The VPX system is just one of our solutions that we've designed in our manufacturing as we grow our product lines.

Speaker Change: As we continue to update our satellite design. The latest technologies, we're also growing our own space product Division.

Carol Craig: As a vertically integrated satellite manufacturer, we have the advantage of being able to design, and build our own subsystem solutions for the space ecosystem, if it makes economic sense. This drives our cost advantage and our flexible approach to manufacturing. Over the last six months, we invested in our next generation satellite design, which includes, more powerful technological solutions, including a VPX open architecture system with simplified assembly and integration, reduced mass, and better performance.

Speaker Change: As a vertically integrated satellite manufacturer, we have the advantage of being able to design and build our own subsystem solutions for the space ecosystem. If it makes economic sense. This drives our cost advantage and our flexible approach to manufacturing.

Speaker Change: Over the last six months, we invested in our next generation satellite design, which includes more powerful technological solutions, including a V. P X open architecture system with simplified assembly and integration reduce mass and better performance the.

Carol Craig: The VPX system is just one of our solutions that we've designed in our manufacturing as, we grow our product lines. Other products include flight software, a satellite onboard computer, space-rated graphics, processing unit, and an LVDS cross-point switch card that extends and expands payload capacity.

Speaker Change: The V. P X system is just one of a solution that we've designed and are manufacturing as we grow our product lines.

Carol Craig: Other products include flight software, a satellite on-board computer, space-rated graphics processing unit, and an LVDS cross-point switch card that extends and expands payload capacity. Offering a diversity of products and services that includes our Constellation of Service offering, along with our in-house, manufactured, owned, and operated Constellation, spreads CapEx and research and development across multiple customers. We also have flexibility due to our baseline approach to vertical integration that facilitates the use of the Sidus baseline bus design to customize mission solutions from LEO to Cislunar in a cost-effective and timely manner.

Speaker Change: Their products include like software satellite onboard computer base rate, a graphics processing unit and an L. D. G. S Cross point switch car that extends and expands payload capacity.

Offering a diversity of products and services that includes our constellation as a service offering along with our in house manufactured owned and operated constellation spreads Capex and research and development across multiple customers. We also have flexibility due to our baseline approach to vertical integration that facilitates the use of the site is baseline bus design to customize.

Carol Craig: Offering a diversity of products and services that includes our Constellation of Service, offering, along with our in-house, manufactured, owned, and operated Constellation, spreads, CAPEX and research and development across multiple customers.

Carol Craig: We also have flexibility due to our baseline approach to vertical integration that facilitates, the use of the CITES baseline bus design to customize mission solutions from LEO to fifth lunar in a cost-effective and timely manner.

Speaker Change: Mission solutions from Leo to fifth lunar in a cost effective and timely manner.

Carol Craig: We anticipate continued growth in our pipeline and backlog, with increased revenue recognition expected as our constellation expands. We've signed contracts for data, and we expect additional data contracts over the life of the satellite. Our initial focus with LS1 was to fulfill primary mission objectives for customers and prove out our technology and business model, followed by expansion of our data offerings.

Carol Craig: We anticipate continued growth in our pipeline and backlog, with increased revenue recognition, expected as our Constellation expands.

We anticipate continued growth in our pipeline and backlog with increased revenue recognition expected as our constellation expand we've signed contracts for data and we expect additional data contracts over the life of the satellite.

Carol Craig: We've signed contracts for data, and we expect additional data contracts over the life of, the satellite.

Carol Craig: Our initial focus with LS1 was to fulfill primary mission objectives for customers and, prove out our technology and business model, followed by expansion of our data offerings.

Speaker Change: Our initial focus with L. S. One was to fulfill primary mission objectives for customers and prove out our technology and business model followed by expansion of our data offerings.

Carol Craig: As we look at our financial results and projections, it's important to describe the diversity in our business model as it relates to types of contracts and margins and year-over-year comparisons. Our manufacturing and satellite contracts take varying forms, firm fixed price, high material, and milestone or progress payments. This results in inconsistent or lumpy revenue recognition quarter over quarter. Our contracts are made up of a mix of material and labor expenses, and those expenses can occur at different times over the life of a contract. Because of this, quarterly comparisons are not necessarily indicative of expected annual results.

Carol Craig: As we look at our financial results and projections, it's important to describe the diversity in, our business model as it relates to types of contracts and margins and year-over-year comparisons. Our manufacturing and satellite contracts take varying forms, firm fixed price, high, material, and milestone or progress payments. This results in inconsistent or lumpy revenue recognition quarter-over-quarter.

Speaker Change: As we look at our financial results and projections, it's important to describe the diversity in our business model as it relates to the types of contracts and margin and year over year comparisons.

Speaker Change: Our manufacturing and satellite contracts take varying forms firm fixed price time material and milestone progress payments. This results in inconsistent or lumpy revenue recognition quarter over quarter. Our contracts are made up of a mix of material and labor expenses and those expenses can occur at different times over the life of a contract.

Carol Craig: Our contracts are made up of a mix of material and labor expenses, and those expenses can, occur at different times over the life of a contract.

Carol Craig: Because of this, quarterly comparisons are not necessarily indicative of expected annual, results.

Speaker Change: As of this quarterly comparisons are not necessarily indicative of expected annual result.

Carol Craig: We look at our revenue projections and gross margins on a year-over-year basis and expect, that 2024 will demonstrate the importance of annual vice quarterly comparisons.

Speaker Change: When we look at our revenue projections and gross margins on a year over year basis, and expect that 'twenty 'twenty four will demonstrate the importance of annual vice quarterly comparisons.

Carol Craig: We look at our revenue projections and gross margins on a year-over-year basis and expect that 2024 will demonstrate the importance of annual vice quarterly comparison. And now I'll hand the call over to Bill to discuss our financial highlights. Thank you, Carol.

Carol Craig: And now I'll hand the call over to Bill to discuss our financial highlights.

Speaker Change: And now I'll hand, the call over to bill to discuss our financial highlights.

Bill White: Thank you, Carol.

Bill White: It's a pleasure to be here today to discuss our second quarter 2024 financial results. As Carol mentioned, successfully launching LindsaySat into orbit was a major achievement for the company and a key milestone in our strategy to drive Sidus towards higher revenues and improved margins. As with any first-time endeavor, we learn valuable lessons from the successful launch and deployment of our initial satellite. These insights have been applied to our current satellites in production, including LZSAT-2, which is scheduled for launch later this year. We are eager to see the advancements and improvements once these satellites are in orbit.

Bill White: Thank you Carol it's a pleasure to be here today to discuss our second quarter 2024 financial results.

Bill White: It's a pleasure to be here today to discuss our second quarter 2024 financial results.

Bill White: As Carol mentioned, successfully launching LZSAT into orbit was a major achievement for the company, and a key milestone in our strategy to drive Sidus towards higher revenues and improved margins. As with any first-time endeavor, we learned valuable lessons, from the successful launch and deployment of our initial satellite.

Bill White: As Gerald mentioned successfully launching literally sat into orbit was a major achievement for the company and a key milestone in our strategy to drive side is towards higher revenues and improved margins.

Speaker Change: As with any first time endeavor, we learned valuable lessons from the successful launch and deployment of our initial satellite.

Bill White: These insights have been applied to our current satellites in production, including LZSAT-2, which is scheduled for launch later this year.

Speaker Change: His insights have been applied to our current satellites in production, including Lizzy set too which is scheduled for launch later this year.

Bill White: We are eager to see the advancements and improvements once these satellites are in orbit.

Speaker Change: We are eager to see the advancements and improvements once these satellites are in orbit.

Bill White: As technology continues to evolve rapidly, we are committed to enhancing our own capabilities to expand our customer base and optimize our data revenue streams as part of our growing business portfolio. In addition to technology, we have invested in the growth of our company through capital expenditures on satellites, research and development, and the implementation of a robust ERP system. Now on to our second quarter 2024 financial results. Total revenue for the three months ended June 30, 2024 was just under $1 million, a decrease of approximately $440,000 compared to total revenue for the three months ended June 30, 2023. This decrease was primarily driven by the timing of fixed price milestone contracts.

Bill White: As technology continues to evolve rapidly, we are committed to enhancing our own capabilities, to expand our customer base and optimize our data revenue streams as part of our growing business portfolio.

Speaker Change: As technology continues to evolve rapidly we are committed to enhancing our own capabilities to expand our customer base and optimize our data revenue streams as part of our growing business portfolio.

Bill White: In addition to technology, we have invested in the growth of our company, through capital expenditures on satellites, research and development, and the implementation of a robust ERP system.

Speaker Change: In addition to technology, we have invested in the growth of our company through capital expenditures on satellites research and development and the implementation of a robust ERP system.

Bill White: Now on to our second quarter 2024 financial results.

Speaker Change: Now onto our second quarter 2024 financial results.

Bill White: Total revenue for the three months ended June 30, 2024 was just under $1 million, a decrease of approximately $440,000 compared to total revenue for the three months ended June 30, 2023. This decrease was primarily driven by the timing of fixed-price milestone contracts, fewer satellite-related revenue payments in the first half of 2024, and delayed timing of expected contract awards, including those tied to related party contracts.

Speaker Change: Total revenue for the three months ended June 32024. It was just under 1 billion a decrease of approximately 440000 compared to total revenue for the three months ended June 32023.

Speaker Change: Decrease was primarily driven by the timing of fixed priced milestone contracts.

Bill White: Your satellite related revenue payments in the first half of 2024 and delayed timing of expected contract awards, including those tied to related party contracts. Cost of revenue increased 105% for the three months ended June 30, 2024, to approximately $1.8 million as compared to $860,000 for the three months ended June 30, 2023. The increase was primarily driven by our mix of contracts with higher material expenses vice labor shifts and milestone payments for our higher margin satellite related businesses and higher depreciation costs associated with the monthly depreciation of our first satellite asset deployed March 2024, appreciation will continue to impact cost of revenue until we can generate a higher volume of satellite and data related revenues which have high margins to offset the related depreciation expense.

Speaker Change: Your satellite related revenue payments in the first half of 2024 and delayed timing of expected contract awards, including those tied to related party contracts.

Bill White: Cost of revenue increased 105% for the three months ended June 30, 2024, to approximately $1.8 million as compared to $860,000 for the three months ended June 30, 2023. The increase was primarily driven by our mix of contracts with higher material expenses, vice labor shifts and milestone payments for our higher margin satellite-related businesses and higher depreciation costs associated with the monthly depreciation of our first satellite asset deployed March 2024.

Speaker Change: Cost of revenue increased to 105% for the three months ended June 32020 for approximately $1 8 billion as compared to 860000 for the three months ended June 32023. The increase was primarily driven by our mix of contracts with higher material expenses, Vice labor shifts and milestone payments for <unk>.

Speaker Change: Your margin satellite related businesses and higher depreciation costs associated with the monthly depreciation of our first satellite asset deployed March 2024.

Bill White: Depreciation will continue to impact cost of revenue until we can generate a higher volume of satellite, and data-related revenues which have high margins to offset the related depreciation expense.

Speaker Change: Depreciation will continue to impact cost of revenue until we can generate a higher volume of satellite and data related revenues, which have higher margins to offset the related depreciation expense.

Bill White: Our gross profit for the quarter ended June 30, 2024 decreased approximately $1.35 million, resulting in a net loss of approximately $841,000 compared to a gross profit of approximately $508,000 for the three months ended June 30, 2023.

Bill White: Our gross profit for the quarter ended June 30, 2024, decreased approximately $1.35 million, resulting in a net loss of approximately $841,000 compared to a gross profit of approximately $508,000 for the three months ended June 30, 2023. Gross profit margin was negative 91% for the second quarter 2024 as compared to a positive 37% for the second quarter of 2023. Again, this was driven by the timing of satellite related payments and fixed price milestone contracts in the first half of 2024 and higher costs related to the depreciation of our first satellite asset.

Speaker Change: Our gross profit for the quarter ended June 32024 decreased approximately 1.35 million, resulting in a net loss of approximately 841000 compared to a gross profit of approximately 508000 for the three months ended June 32023.

Bill White: Gross profit margin was negative 91% for the second quarter of 2024, as compared to a positive 37% for the second quarter of 2023. Again, this was driven by the timing of satellite-related payments, and fixed price milestone contracts in the first half of 2024 and higher costs related to the depreciation of our first satellite asset.

Speaker Change: Gross profit margin was negative 91% for the second quarter 2024, as compared to a positive 37% for the second quarter of 2023 again. This was driven by the timing of satellite related payments and fixed price milestone contracts in the first half of 2024 and higher costs related to the depreciation of her first satellite asset.

Bill White: SG&A expenses for the first quarter, June 30, 2024, totaled approximately $3.1 million, as compared to $3.6 million for the same period last year. The $500,000 decrease was primarily due to a reduction in payroll, and related expenses directly related to building our satellites which were moved to fixed assets. D&O insurance expense and marketing and investor-relation expenses also decreased.

Bill White: SG&A expenses for the first quarter, June 30, 2024, totaled approximately $3.1 million, as compared to $3.6 million for the same period last year. The $500,000 decrease was primarily due to a reduction in payroll and related expenses directly related to building our satellites, which were moved to fixed assets. B&O insurance expense and marketing and investment relations expenses also decreased.

Speaker Change: SG&A expenses for the first quarter June 32024 totaled approximately $3 1 million as compared to $3 6 million for the same period last year. The $500000 decrease was primarily due to a reduction in payroll and related expenses directly related to building our satellites, which are.

Speaker Change: Move to fixed assets.

Speaker Change: Insurance expense and marketing and Investor relation expenses also decreased.

Bill White: To provide investors with additional information in connection with our results, as determined in accordance with GAAP, we also include in our 2023 Form 10-K non-GAAP measures to determine our adjusted EBITDA.

Bill White: To provide investors with additional information in connection with our results as it's determined in accordance with GAAP, we also include in our 2023 Form 10-K non-GAAP measures to determine our adjusted EBITDA. We use adjusted EBITDA to evaluate our operating performance and make strategic decisions about the company's future direction. Adjusted EBITDA loss, a non-gap measure for the three months ended June 30, 2024, totaled $3.2 million as compared to an adjusted EBITDA loss of $2.8 million for the same period last year.

Speaker Change: Sure provide investors with additional information in connection with our results determined in accordance with GAAP. We also include in our 2023 Form 10-K, non-GAAP measures to determine our adjusted EBITDA, we use adjusted EBITDA to evaluate our operating performance and make strategic decisions about the company's future direction.

Bill White: We use adjusted EBITDA to evaluate our operating performance, and make strategic decisions about the company's future direction. Adjusted EBITDA loss, a non-gap measure for the three months ended June 30, 2024, totaled, $3.2 million as compared to an adjusted EBITDA loss of $2.8 million for the same period last year. Total non-gap adjustments for interest expense, depreciation and amortization, acquisition, deal costs, severance costs, capital markets and advisory fees, equity-based compensation and warrant costs are provided in the reconciliation table listed in our second quarter 2024 earnings, PR release earlier today.

Speaker Change: Adjusted EBITDA loss, a non-GAAP measure for the three months ended June 32024 totaled $3 2 million as compared to an adjusted EBITDA loss of $2 8 million for the same period last year.

Bill White: Total non-gap adjustments for interest expense, depreciation and amortization, acquisition deal costs, severance costs, capital markets and advisory fees, equity-based compensation and warrant costs are provided in the reconciliation table listed in our second quarter 2024 earnings PR released earlier today. Net loss for the three months ended June 30, 2024 was $4.1 million as compared to a net loss of $3.5 million for the same period last year.

Speaker Change: Total non-GAAP adjustments for interest expense depreciation and amortization acquisition deal costs severance cost capital markets and advisory fees equity based compensation and warrant costs are provided in the reconciliation table listed in our second quarter 2024.

Speaker Change: Earnings PR released earlier today.

Bill White: Net loss for the three months ended June 30, 2024 was $4.1 million as compared to a net, loss of $3.5 million for the same period last year.

Speaker Change: Net loss for the three months ended June 32024 was $4 1 million as compared to a net loss of $3 5 million for the same period last year.

Bill White: Turning to the balance sheet, as of June 30, 2024, the company had cash of $1.4 million, as compared to $1.2 million at December 31, 2023. As we continue to manage our cash flow conservatively, we will prioritize the strategic use of our, cash resources to pay down debt and fund our upcoming satellite builds, which are crucial for driving revenue and overall growth and profitability.

Bill White: Turning to the balance sheet as of June 30, 2024, the company had cash of $1.4 million as compared to $1.2 million at December 31, 2023. As we continue to manage our cash flow conservatively, we will prioritize the strategic use of our cash resources to pay down debt and fund our upcoming satellite builds, which are crucial for driving revenue and overall growth and profitability. We will also continue to identify additional opportunities to reduce expenses and increase efficiencies within our business. With that, I'll hand the call back over to Carol. Thank you, Bill.

Turning to the balance sheet as of June 32024, the company had cash of $1 4 million as compared to $1 2 million at December 31 2023.

Speaker Change: As we continue to manage our cash flow conservatively, we will prioritize strategic use of our cash resources to pay down debt and fund our upcoming satellite builds which are crucial for driving revenue and overall growth and profitability. We will also continue to identify additional opportunities to reduce expenses and increase efficiencies within our <unk>.

Bill White: We will also continue to identify additional opportunities to reduce expenses and increase, efficiencies within our business.

Carol Craig: With that, I'll hand the call back over to Carol.

Speaker Change: With that I'll hand, the call back over to Carol.

Carol Craig: Thank you, Bill.

Carol: Thank you Bill.

Carol Craig: With over five months of LZSAT operating in orbit, Sidus Space is entering an exciting phase of growth as we continue to execute our strategic priorities. Our 3D-printed AI-enhanced LISI stats are central to our future high-margin data-as-a-service business model designed to integrate multiple technologies. These satellites enable simultaneous data collection that can support industries such as agriculture, maritime, oil and gas, among others.

Carol Craig: With over five months of LISVSAT operating in orbit, Cytospace is entering an exciting, phase of growth as we continue to execute our strategic priorities. Our 3D-printed AI-enhanced LISVSATs are central to our future high-margin data-as-a-service, business model designed to integrate multiple technologies. These satellites enable simultaneous data collection that can support industries such, as agriculture, maritime, oil and gas, among others.

Carol: Over five months I've used that operating in orbit Satisfice is entering an exciting phase of growth as we continue to execute our strategic priorities.

Speaker Change: Our three D printed AI enhanced movies that are central to our future high margin data as a service business model designed to integrate multiple technology.

These satellites enable simultaneous data collection that can support industry, such as agriculture maritime oil and gas among others. We're committed to expanding further into these sectors to generate additional revenue ultimately increasing value for our shareholders.

Carol Craig: We're committed to expanding further into these sectors to generate additional revenue, ultimately increasing value for our shareholders. Our next two satellites are in advanced stages of production and are scheduled for launch within the next six to nine months. We are diligently executing our plan to build a unique multi-mission constellation, and the proactive steps we took early on, such as securing a multi-launch agreement with SpaceX and purchasing subsystems with long lead times, are enabling us to deliver a steady cadence of launches to meet the customer demand that we promised.

Carol Craig: We're committed to expanding further into these sectors to generate additional revenue, ultimately increasing value for our shareholders.

Carol Craig: Our next two satellites are in advanced stages of production and are scheduled for launch, within the next six to nine months.

Our next two satellites are in advanced stages of production and are scheduled for launch within the next six to nine months, we are diligently executing our plan to build a unique multi mission constellation and the proactive steps. We took early on such a securing and multi launch agreement with Spacex and purchasing subsystems with long lead times are enabling us to deliver a steady cadence.

Carol Craig: We're diligently executing our plan to build a unique multi-mission constellation. And the proactive steps we took early on, such as securing a multi-launch agreement, with SpaceX and purchasing subsystems with long lead times, are enabling us to deliver a steady cadence of launches to meet the customer demand that we promised.

Speaker Change: Launches to meet the customer demand that we've promised.

Carol Craig: The success we've already achieved with our very first satellite has strengthened the confidence of our team, industry partners, current and potential customers, and shareholders alike. I want to express my sincere gratitude to all our shareholders for your continued support of Sidus. Whether you've been with us from the beginning or have recently joined, you are an integral part of our journey as we create unprecedented access to space. I remain fully committed to restoring shareholder value and am optimistic about the higher revenue streams we anticipate from our satellite manufacturing and our space data-as-a-service constellation.

Carol Craig: The success we've already achieved with our very first satellite has strengthened the, confidence of our team, industry partners, current and potential customers and shareholders alike.

Speaker Change: Our success has already achieved with our very first satellite has strengthened the confidence of our team industry partners current and potential customers and shareholders alike.

Carol Craig: I want to express my sincere gratitude to all our shareholders for your continued support of Cytos.

Speaker Change: I want to express my sincere gratitude to all our shareholders for your continued support of scientists whether you've been with us from the beginning or have recently joined you are an integral part of our journey as we create unprecedented access to space.

Carol Craig: Whether you've been with us from the beginning or have recently joined, you are an integral, part of our journey as we create unprecedented access to space.

Carol Craig: I remain fully committed to restoring shareholder value and am optimistic about the higher revenue, streams we anticipate from our satellite manufacturing and our space data-as-a-service constellation.

I remain fully committed to restoring shareholder value and I'm optimistic about the higher revenue streams, we anticipate from our satellite manufacturing and our space data as a service constellation.

Carol Craig: Thank you to everyone for joining us today for Sidus Space's second quarter 2024 earnings conference call. I will now ask the operator to close the line. This concludes today's conference and you may disconnect your line. Thank you for your

Speaker Change: Thank you to everyone for joining us today for side of things in second quarter 2024 earnings Conference call I will now ask the operator to close the line.

Carol Craig: Thank you to everyone for joining us today for Cytospace's second quarter 2024 Earnings Conference Call.

Operator: I will now ask the operator to close the line.

Operator: This concludes today's conference and you may disconnect your lines at this time.

Speaker Change: This concludes today's conference and you may disconnect your lines at this time.

Operator: Thank you for your participation.

Speaker Change: Thank you for your participation.

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Unknown Attendee: Doris Day, Unknown Attendee, Valter Pinto, Carol Craig, Teresa Burchfield, Sidus Space

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Unknown Attendee: Greetings and welcome to the Sidest Space 2nd quarter, 2024 results and business update.

Unknown Attendee: Greetings and welcome to the Sidest Space 2nd quarter, 2024 results and business update. At this time, all participants aren't always an only mode. A question and access session will follow the whole presentation.

Operator: At this time, all participants aren't always an only mode.

Operator: If anyone should require operator or something during the conference, please press star zero on your phone. She's bad.

Unknown Attendee: It is not my pleasure to introduce your host Bill White, the CFO. Thank you. Maybe in.

Operator: A question and access session will follow the whole presentation.

Bill White: Good evening, everyone. And thank you for joining us for Sidest Space's 2nd quarter, 2024 earnings conference called. Joining us today from the company is Carol Craig, our chairman and chief executive officer and myself Bill White, chief financial officer. During today's call, we make certain forward looking statement. These statements are based on current expectations and assumptions. And then the results are subject to risk and uncertainties. Many factors could cause actual results to differ materially from the forward looking statements made on this call.

Operator: If anyone should require operator or something during the conference, please press star zero on your phone.

Unknown Attendee: She's bad.

Bill White: These factors include our ability to estimate operational expenses and liquidity needs. Customers demand supply chain delays, including launch providers and extended sales cycles. For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www. SidestSpace.com. Listeners are caution not to put any undue reliance on forward looking statements and the company specifically disclaims any obligations to update the forward looking statements that may be discussed during this call.

Bill White: It is not my pleasure to introduce your host Bill White, the CFO.

Bill White: At this time, I'd like to turn the call over to Carol Craig. Carol, please go ahead. Thank you, Bill.

Unknown Attendee: Thank you.

Unknown Attendee: Maybe in.

Bill White: Good evening, everyone.

Carol Craig: And welcome everyone. For those of you who may be new to our company and our mission, site of space is a provider of comprehensive space infrastructure solutions that include space, space, data, the service on our proprietary on orbit satellite platform. We are US founded and based in Cape Canaver, Florida, near Kennedy Space Center, where we operate from a 35,000 square foot manufacturing facility. We support space manufacturing for other companies, while also managing our expanding constellation focused on AI enabled data to service. Our mission control center is located in Merritt Island, Florida, also part of the space coast.

Bill White: And thank you for joining us for Sidest Space's 2nd quarter, 2024 earnings conference called.

Bill White: Joining us today from the company is Carol Craig, our chairman and chief executive officer and myself Bill White, chief financial officer.

Bill White: During today's call, we make certain forward looking statement. These statements are based on current expectations and assumptions. And then the results are subject to risk and uncertainties. Many factors could cause actual results to differ materially from the forward looking statements made on this call.

Bill White: These factors include our ability to estimate operational expenses and liquidity needs.

Carol Craig: As the space economy evolves from a niche sector to a mainstream industry, it's generating value across various fields and addressing global challenges such as military support, space exploration, and climate change. The impact of space in the satellite industry is becoming increasingly recognized, driving a growing demand for space derived data and solutions. What sets us apart is our holistic approach to addressing our clients most pressing challenges. We offer cost effective solutions with deep expertise across the entire space life cycle, from hardware manufacturing to space-based data delivery and mission planning and operations.

Carol Craig: Unlike other constellation operators who focus on a single business line, such as specific Earth observation sensors, or particular customer segments like the Department of Defense, we have the benefit of optionality, or not dependent on a single line of business or customer. This diversity mitigates risks associated with external factors like macroeconomic shifts or technological disruption. Our flexibility allows us to depth swiftly to market changes, supporting growth across all our business lines. We're currently generating revenue and have been for well over a decade and are growing our pipeline across all our businesses.

Carol Craig: The hard work of the last couple of years has led us into a period of tremendous activity and excitement for Sidus Space. In March, we achieved a significant milestone with our first launch success of our Lizzie Sat One. Our technology has now proven, patented, and validated and we're moving forward with executing our vision and expanding our full stack space business. We have now standing start to 2024 and I'm pleased to report that operationally and technically we've had another milestone quarter as we continue to positive momentum from Lizzie Sat One successful deployment via space X transporter 10 rideshare mission.

Carol Craig: Lizzie Sat One has performed very well in its first five months in orbit, meeting mission objectives and activating sensors. Notably, we believe Lizzie Sat One is the first of its kind hybrid 3D printed AI enhanced multi mission satellite and remains unique in its technology and multi purpose capabilities. It lays a solid foundation for future growth as we continue with plans to expand our constellation. Lizzie Sat Two and Three are in final stages of production and as of today everything is on track and moving according to the latest schedule which is dependent on launch dates.

Carol Craig: We are on target for two launches in the next six to nine months with the first currently manifested for the fourth quarter of this year with space X. Of course, launch schedules subject to many factors including several outside of our control. In the space industry, delays are common and do not necessarily indicate issues. Some delays are completely out of control like launch provider schedule changes. As we continue to build and launch our constellation we expect to make changes to schedule launches and technologies as driven by market and customer needs.

Bill White: Customers demand supply chain delays, including launch providers and extended sales cycles.

Bill White: For more information about these risks and uncertainties, please refer to the risk factors in the company's filings with the Securities and Exchange Commission, each of which can be found on our website, www.

Bill White: SidestSpace.com.

Bill White: Listeners are caution not to put any undue reliance on forward looking statements and the company specifically disclaims any obligations to update the forward looking statements that may be discussed during this call.

Bill White: At this time, I'd like to turn the call over to Carol Craig.

Carol Craig: Sometimes a business case supports a strategic schedule change like an opportunity to integrate advanced technology or customer payload. As a reminder, our satellites have an expected lifespan of about five years and consideration is always given to maximize return on investment and drive shareholder value to the life of the satellite. Weighing it around 225 pounds, Lizzie Sat is a more advanced and versatile satellite compared to typical CubeSats which are of smaller size and weight. Our larger size Lizzie Sat supports a range of missions and applications allowing for simultaneous multi-sensor data collection. This design optimizes payload capacity and mission flexibility supporting various customers and industries with a single cost effective satellite.

Carol Craig: Carol, please go ahead.

Carol Craig: Thank you, Bill.

Carol Craig: And welcome everyone.

Carol Craig: For those of you who may be new to our company and our mission, site of space is a provider of comprehensive space infrastructure solutions that include space, space, data, the service on our proprietary on orbit satellite platform.

Carol Craig: We are US founded and based in Cape Canaver, Florida, near Kennedy Space Center, where we operate from a 35,000 square foot manufacturing facility.

Carol Craig: Our focus on diversity from the start has been integral to our strategy. Looking back on what we've accomplished since the start of Q2, there are a lot of firsts for scientists, our customers, and space in general. In addition to launching and deploying the first 3D printed AI enhanced multi-mission satellite, this past quarter we successfully completed a mission contracted by NASA for an on orbit demonstration of an autonomous systems hardware software payload developed at NASA Stennis.

Carol Craig: We support space manufacturing for other companies, while also managing our expanding constellation focused on AI enabled data to service. Our mission control center is located in Merritt Island, Florida, also part of the space coast.

Carol Craig: As the space economy evolves from a niche sector to a mainstream industry, it's generating value across various fields and addressing global challenges such as military support, space exploration, and climate change.

Carol Craig: The impact of space in the satellite industry is becoming increasingly recognized, driving a growing demand for space derived data and solutions.

Carol Craig: This marks the first time NASA Stennis has ever flown a hardware software payload in this space recognizes a historic milestone by the NASA Stennis Center director. We were contracted by NASA to not only integrate and supply the technology and software but to handle launch and satellite activation and onboard data collection. Another first relates to our high performance artificial intelligence delivery platform feather edge. AI and space-simplified data analysis by running algorithms directly on our satellites, reducing identification time from hours to seconds.

Carol Craig: So, Lizzie's at one mission demonstrated feather edge's ability to upload new algorithms post-launch, run a machine-vision algorithm on the hardware accelerator capable of processing data 300 times faster than a CPU, and to downlink health and status data to our Sidest Mission Control Center in Maridown, Florida. Our Google-powered AI processor sets the groundwork for substantial upgrades on future launches, which is expected to include in video-powered AI accelerates with 25 times more computing power than our previous version of feather edge, resulting in what we believe will be the highest performance edge computing capability on orbit.

Carol Craig: The term edge computing is often used to describe as a distributed computing system where data processing occurs close to where the data is generated. This reduces the time to receive data and it allows for near-real-time data analysis, which is essential to providing the building blocks for data center-scaled computing on orbit.

Carol Craig: So, what does all that mean? Well, one, scientists can successfully run high-performance computers in space. These computers can be scaled and swapped incredibly fast on the order of weeks, not years, to adapt to customer market demands for hardware. Two, we have a system flexible enough to support new customer missions post-launch, new software and algorithm updates, which allows scientists to generate additional revenue on Lizzy's sets that have already been launched. And three, the feather edge technology is now providing traction in growth markets, such as rapid fire detection.

Carol Craig: We demonstrated AI enhanced the identification of fires on orbit using cytos-developed algorithms. Unlike traditional methods, which rely on infrared sensors to collect data and downlink it to the ground for processing, our feather edge solution supports advanced algorithms trained on representative imagery to deliver market-leading accuracy and reliability in thermal data acquisition and analysis. A significant is that our algorithm was 98% accurate and took five milliseconds to process the image. Our full stack approach to space-based services, vertically integrating, manufacturing and operation of all spacecraft systems, including artificial intelligence, enables us to provide what we believe is the most competitive space-based computing solution on the market.

Carol Craig: What sets us apart is our holistic approach to addressing our clients most pressing challenges.

Carol Craig: As we've always said, we're not only focused on lower-earth orbit, but also the moon, Mars and beyond. The moon provides an opportunity to build an infrastructure that enables human permanence on the moon and a transition to commercial operations past lower-earth orbit and onto more distant destinations. Our research and development team has been working on expanding our offerings to include geostationary and lunar satellites. Over the next several months, we expect to see a ramp up in our support of sysproner and lunar needs.

Carol Craig: We've previously announced that we are a part of NASA's Lunar Terrain Vehicle Services Award as a partner to Intuitive Machines, which involves heavier cargo delivery and moon surface systems development and operations. This contract represents the first phase of developing a crew rover for team and exploration of the moon's surface. In addition to supporting other partners with lunar solutions, we've also designed a version of Lizzie Set to meet the needs of lunar missions and the needs of our expanding customer base.

Carol Craig: So what does our future look like? Well, to begin with, interest in our satellite manufacturing, data offerings, and long-term partnerships continues to grow, especially following our successful launch, and our revenue pipeline supports a strong growth outlook. Our equipment ability to design, build, launch, and operate 120 kg of satellite is the obvious catalyst to the growth of our pipeline. Over the last few months, we submitted a range of proposals and responses to solicitations to government and commercial customers.

Carol Craig: We offer cost effective solutions with deep expertise across the entire space life cycle, from hardware manufacturing to space-based data delivery and mission planning and operations.

Carol Craig: These proposals are under evaluation, and we expect to receive the results of contract decisions in the next coming weeks and months. We continue to grow our backlog in contract values and currently have approximately 100 million in our pipeline. We have over 30 active customers in multiple divisions, several of whom are long term, recurring customers, and we continue to add new customers as we add more capabilities and services. Additionally, I'm excited as we look to advance discussions with new strategic partners, especially our global partners.

Carol Craig: In the second quarter, we signed an MOU with NAMASIS Bahrain with plans to establish Sidus, Arabia, joint venture headquartered in Saudi Arabia to develop a satellite manufacturing facility and pursue joint initiatives. This partnership represents a framework that we will look to replicate in other global areas, seeking remote sensing capabilities for environmental and security solutions. As we continue to update our satellite design to the latest technologies, we're also growing our own space product division.

Carol Craig: As a vertically integrated satellite manufacturer, we have the advantage of being able to design and build our own subsystem solutions for the space ecosystem if it makes economic sense. This drives our cost advantage and our flexible approach to manufacturing. Over the last six months, we invested in our next generation satellite design, which includes more powerful technological solutions, including a VPX open architecture system, with simplified assembly and integration, reduced mass and better performance.

Carol Craig: The VPX system is just one of our solutions that we've designed in our manufacturing as we grow our product lines. Other products include flight software, a satellite onboard computer, space rated graphics processing unit, and an LVDS crosspoint switchcar that extends and expands payload capacity. Offering a diversity of products and services that includes our constellations and service offering, along with our in-house manufactured owned and operated constellation spreads, cathex, and research and development across multiple customers.

Carol Craig: We also have flexibility due to our baseline approach to vertical integration that facilitates the use of the slightest baseline bus design to customize mission solutions from Leo to Thyslunar in a cost effective and timely manner. We anticipate continued growth in our pipeline and backlog with increased revenue recognition expected as our constellation expands. We've signed contracts for data and we've expected additional data contracts over the life of the satellite. Our initial focus with LS1 was to fulfill primary mission objectives for customers, improve our technology and business model, followed by expansion of our data offerings.

Carol Craig: Unlike other constellation operators who focus on a single business line, such as specific Earth observation sensors, or particular customer segments like the Department of Defense, we have the benefit of optionality, or not dependent on a single line of business or customer. This diversity mitigates risks associated with external factors like macroeconomic shifts or technological disruption.

Carol Craig: As we look at our financial results and projections, it's important to describe the diversity in our business model as it relates to types of contracts and margins and year over year comparisons. Our manufacturing and satellite contracts take varying forms, firm fixed price, high material, and milestone or progress payment. This results in inconsistent or lumpy revenue recognition quarter over quarter. Our contracts are made up of a mix of material and labor expenses and those expenses can occur at different times over the life of a contract because of this quarterly comparisons are not necessarily indicative of expected annual results.

Carol Craig: We look at our revenue projections and gross margins on a year over year basis and expect that 2024 will demonstrate the importance of annual vice quarterly comparisons.

Bill White: And now I'll hand the call over to Bill to discuss our financial highlights. Thank you, Carol. It's a pleasure to be here today to discuss our second quarter 2024 financial results.

Bill White: As Carol mentioned, successfully launching Lizzy Sad into orbit was a major achievement for the company and a key milestone in our strategy to drive Sidus towards higher revenues and improve margins. As with any first time endeavor, we learned valuable lessons from the successful launch and deployment of our initial satellite. These insights have been applied to our current satellites and production, including Lizzy Sad II, which is scheduled for launch later this year.

Bill White: We are eager to see the advancements and improvements once these satellites are in orbit. As technology continues to evolve rapidly, we are committed to enhancing our own capabilities to expand our customer base and optimize our data revenue streams as part of our growing business portfolio. In addition to technology, we have invested in the growth of our company through capital expenditures on satellites, research and development and the implementation of a robust ERP system.

Carol Craig: Our flexibility allows us to depth swiftly to market changes, supporting growth across all our business lines.

Carol Craig: We're currently generating revenue and have been for well over a decade and are growing our pipeline across all our businesses.

Bill White: Now on to our second quarter, 2024 financial results. Total revenue for the three months ended June 30, 2024 was just under 1 million and decrease of approximately 440,000 compared to total revenue for the three months ended June 30, 2023. This decrease was primarily driven by the timing of fixed price milestone contracts. Your satellite related revenue payments in the first half of 2024 and delay timing of expected contract awards, including those tied to related party contracts.

Bill White: Cost of revenue increased 105% for the three months ended June 30, 2024 to approximately 1.8 million as compared to 860,000 for the three months ended June 30, 2023. The increase was primarily driven by our mix of contracts with higher material expenses, vice labor shifts and milestone payments for our higher margin satellite related businesses and higher depreciation costs associated with the monthly depreciation of our first satellite asset deployed March 2024. Appreciation will continue to impact cost of revenue until we can generate a higher volume of satellite and data related revenues which have high margins to assess the related depreciation expense.

Bill White: Our growth profit for the quarter ended June 30, 2024 decreased approximately 1.35 million, resulting in a net loss of approximately 841,000 compared to a growth profit of approximately 508,000 for the three months ended June 30, 2023. First profit margin was negative 91% for the second quarter 2024 is compared to a positive 37% for the second quarter 2023. Again, this was driven by the timing of satellite related payments and fixed price milestone contracts in the first half of 2024 and higher costs related to the depreciation of our first satellite asset.

Bill White: SGNA expenses for the first quarter June 30, 2024 totaled approximately 3.1 million as compared to 3.6 million for the same period last year. The $500,000 decrease was primarily due to a reduction in payroll and related expenses directly related to building our satellites which were moved to fixed assets. D&O insurance expense and marketing and investor relation expenses also decreased.

Bill White: To provide investors with additional information and connection with our results as it's determined in accordance with GAP, we also include in our 2023 form 10K non-GAP measures to determine our adjusted EBITDA. We use adjusted EBITDA to evaluate our operating performance to make strategic decisions about the company's future corrections. Agency. Adjusted EBITDA loss, a non-GAP measure for the 3-month end of June 30, 2024, total $3.2 million, as compared to an adjusted EBITDA loss of $2.8 million for the same period last year.

Bill White: Total non-GAP adjustments for interest expense, depreciation and amortization, acquisition deal costs, severance costs, capital markets and advisory fees, equity-based compensation and amort costs are provided in the reconciliation table, listed in our second quarter of 2024 earnings PR released earlier today. NetLost for the 3-month end of June 30, 2024 was $4.1 million as compared to a net loss of $3.5 million for the same period last year.

Bill White: Turning to the ballot sheet as of June 30, 2024, the company had cash of $1.4 million as compared to $1.2 million at December 31, 2023. As we continue to manage our cash flow conservatively, we will prioritize the ptqs of our cash resources to pay down debt and fund our upcoming satellite builds with our crucial for driving revenue and overall growth and profitability. We will also continue to identify additional opportunities to reduce expenses and increase efficiencies within our business.

Carol Craig: But that will hand the call back over to Carol. Thank you, Bill. With over five months of living with that operating in orbit, side is facing entering an exciting phase of growth as we continue to execute our strategic priorities.

Carol Craig: The hard work of the last couple of years has led us into a period of tremendous activity and excitement for Sidus Space. In March, we achieved a significant milestone with our first launch success of our Lizzie Sat One. Our technology has now proven, patented, and validated and we're moving forward with executing our vision and expanding our full stack space business.

Carol Craig: We have now standing start to 2024 and I'm pleased to report that operationally and technically we've had another milestone quarter as we continue to positive momentum from Lizzie Sat One successful deployment via space X transporter 10 rideshare mission. Lizzie Sat One has performed very well in its first five months in orbit, meeting mission objectives and activating sensors. Notably, we believe Lizzie Sat One is the first of its kind hybrid 3D printed AI enhanced multi mission satellite and remains unique in its technology and multi purpose capabilities.

Carol Craig: Our 3D printed AI enhanced living with that are central to our future high-margin data service business model designed to integrate multiple technologies. These satellites enable simultaneous data collection that can support industries such as agriculture, maritime, oil and gas among others. We are committed to expanding further into these sectors to generate additional revenue, ultimately increasing value for our shareholders. Our next two satellites are in advance stages of production and are scheduled for launch within the next 6-9 months.

Carol Craig: It lays a solid foundation for future growth as we continue with plans to expand our constellation.

Carol Craig: We are diligently executing our plan to build a unique multi-mission constellation and the proactive steps we took early on, such as securing a multi-launch agreement with SpaceX and purchasing subsystems with long lead times, are enabling us to deliver a steady cadence of launches to meet the customer demand that we promised. The success we've already achieved with our very first satellite has strengthened the confidence of our team, industry partners, current potential customers and shareholders alike.

Carol Craig: Lizzie Sat Two and Three are in final stages of production and as of today everything is on track and moving according to the latest schedule which is dependent on launch dates. We are on target for two launches in the next six to nine months with the first currently manifested for the fourth quarter of this year with space X. Of course, launch schedules subject to many factors including several outside of our control.

Carol Craig: I want to express my sincere gratitude to all our shareholders for your continued support of SIDAS. Whether you've been with us from the beginning or have recently joined, you are an integral part of our journey as we create unprecedented access to space. I remain fully committed to restoring shareholder value and am optimistic about the higher revenue streams we anticipate from our satellite manufacturing and our space data as a service constellation.

Carol Craig: In the space industry, delays are common and do not necessarily indicate issues. Some delays are completely out of control like launch provider schedule changes.

Unknown Attendee: Thank you to everyone for joining us today for SIDAS Space's second quarter, 2024 earnings conference call.

Carol Craig: As we continue to build and launch our constellation we expect to make changes to schedule launches and technologies as driven by market and customer needs. Sometimes a business case supports a strategic schedule change like an opportunity to integrate advanced technology or customer payload.

Operator: I will now ask the operator to close the line. This concludes today's conference and you may disconnect your line at this time. Thank you for your participation. [inaudible] a lot of work to do. She's got a lot of work to do.

Carol Craig: As a reminder, our satellites have an expected lifespan of about five years and consideration is always given to maximize return on investment and drive shareholder value to the life of the satellite.

Carol Craig: Weighing it around 225 pounds, Lizzie Sat is a more advanced and versatile satellite compared to typical CubeSats which are of smaller size and weight. Our larger size Lizzie Sat supports a range of missions and applications allowing for simultaneous multi-sensor data collection. This design optimizes payload capacity and mission flexibility supporting various customers and industries with a single cost effective satellite.

Carol Craig: Our focus on diversity from the start has been integral to our strategy.

Carol Craig: Looking back on what we've accomplished since the start of Q2, there are a lot of firsts for scientists, our customers, and space in general. In addition to launching and deploying the first 3D printed AI enhanced multi-mission satellite, this past quarter we successfully completed a mission contracted by NASA for an on orbit demonstration of an autonomous systems hardware software payload developed at NASA Stennis.

Carol Craig: This marks the first time NASA Stennis has ever flown a hardware software payload in this space recognizes a historic milestone by the NASA Stennis Center director. We were contracted by NASA to not only integrate and supply the technology and software but to handle launch and satellite activation and onboard data collection.

Carol Craig: Another first relates to our high performance artificial intelligence delivery platform feather edge.

Carol Craig: AI and space-simplified data analysis by running algorithms directly on our satellites, reducing identification time from hours to seconds. So, Lizzie's at one mission demonstrated feather edge's ability to upload new algorithms post-launch, run a machine-vision algorithm on the hardware accelerator capable of processing data 300 times faster than a CPU, and to downlink health and status data to our Sidest Mission Control Center in Maridown, Florida.

Carol Craig: Our Google-powered AI processor sets the groundwork for substantial upgrades on future launches, which is expected to include in video-powered AI accelerates with 25 times more computing power than our previous version of feather edge, resulting in what we believe will be the highest performance edge computing capability on orbit. The term edge computing is often used to describe as a distributed computing system where data processing occurs close to where the data is generated. This reduces the time to receive data and it allows for near-real-time data analysis, which is essential to providing the building blocks for data center-scaled computing on orbit.

Carol Craig: So, what does all that mean?

Carol Craig: Well, one, scientists can successfully run high-performance computers in space.

Carol Craig: These computers can be scaled and swapped incredibly fast on the order of weeks, not years, to adapt to customer market demands for hardware.

Carol Craig: Two, we have a system flexible enough to support new customer missions post-launch, new software and algorithm updates, which allows scientists to generate additional revenue on Lizzy's sets that have already been launched.

Carol Craig: And three, the feather edge technology is now providing traction in growth markets, such as rapid fire detection.

Carol Craig: We demonstrated AI enhanced the identification of fires on orbit using cytos-developed algorithms. Unlike traditional methods, which rely on infrared sensors to collect data and downlink it to the ground for processing, our feather edge solution supports advanced algorithms trained on representative imagery to deliver market-leading accuracy and reliability in thermal data acquisition and analysis. A significant is that our algorithm was 98% accurate and took five milliseconds to process the image.

Carol Craig: Our full stack approach to space-based services, vertically integrating, manufacturing and operation of all spacecraft systems, including artificial intelligence, enables us to provide what we believe is the most competitive space-based computing solution on the market.

Carol Craig: As we've always said, we're not only focused on lower-earth orbit, but also the moon, Mars and beyond. The moon provides an opportunity to build an infrastructure that enables human permanence on the moon and a transition to commercial operations past lower-earth orbit and onto more distant destinations.

Carol Craig: Our research and development team has been working on expanding our offerings to include geostationary and lunar satellites.

Carol Craig: Over the next several months, we expect to see a ramp up in our support of sysproner and lunar needs. We've previously announced that we are a part of NASA's Lunar Terrain Vehicle Services Award as a partner to Intuitive Machines, which involves heavier cargo delivery and moon surface systems development and operations.

Carol Craig: This contract represents the first phase of developing a crew rover for team and exploration of the moon's surface.

Carol Craig: In addition to supporting other partners with lunar solutions, we've also designed a version of Lizzie Set to meet the needs of lunar missions and the needs of our expanding customer base.

Carol Craig: So what does our future look like?

Carol Craig: Well, to begin with, interest in our satellite manufacturing, data offerings, and long-term partnerships continues to grow, especially following our successful launch, and our revenue pipeline supports a strong growth outlook. Our equipment ability to design, build, launch, and operate 120 kg of satellite is the obvious catalyst to the growth of our pipeline. Over the last few months, we submitted a range of proposals and responses to solicitations to government and commercial customers.

Carol Craig: These proposals are under evaluation, and we expect to receive the results of contract decisions in the next coming weeks and months.

Carol Craig: We continue to grow our backlog in contract values and currently have approximately 100 million in our pipeline. We have over 30 active customers in multiple divisions, several of whom are long term, recurring customers, and we continue to add new customers as we add more capabilities and services.

Carol Craig: Additionally, I'm excited as we look to advance discussions with new strategic partners, especially our global partners.

Carol Craig: In the second quarter, we signed an MOU with NAMASIS Bahrain with plans to establish Sidus, Arabia, joint venture headquartered in Saudi Arabia to develop a satellite manufacturing facility and pursue joint initiatives.

Carol Craig: This partnership represents a framework that we will look to replicate in other global areas, seeking remote sensing capabilities for environmental and security solutions.

Carol Craig: As we continue to update our satellite design to the latest technologies, we're also growing our own space product division. As a vertically integrated satellite manufacturer, we have the advantage of being able to design and build our own subsystem solutions for the space ecosystem if it makes economic sense. This drives our cost advantage and our flexible approach to manufacturing.

Carol Craig: Over the last six months, we invested in our next generation satellite design, which includes more powerful technological solutions, including a VPX open architecture system, with simplified assembly and integration, reduced mass and better performance.

Carol Craig: The VPX system is just one of our solutions that we've designed in our manufacturing as we grow our product lines. Other products include flight software, a satellite onboard computer, space rated graphics processing unit, and an LVDS crosspoint switchcar that extends and expands payload capacity.

Carol Craig: Offering a diversity of products and services that includes our constellations and service offering, along with our in-house manufactured owned and operated constellation spreads, cathex, and research and development across multiple customers.

Carol Craig: We also have flexibility due to our baseline approach to vertical integration that facilitates the use of the slightest baseline bus design to customize mission solutions from Leo to Thyslunar in a cost effective and timely manner.

Carol Craig: We anticipate continued growth in our pipeline and backlog with increased revenue recognition expected as our constellation expands.

Carol Craig: We've signed contracts for data and we've expected additional data contracts over the life of the satellite.

Carol Craig: Our initial focus with LS1 was to fulfill primary mission objectives for customers, improve our technology and business model, followed by expansion of our data offerings.

Carol Craig: As we look at our financial results and projections, it's important to describe the diversity in our business model as it relates to types of contracts and margins and year over year comparisons. Our manufacturing and satellite contracts take varying forms, firm fixed price, high material, and milestone or progress payment. This results in inconsistent or lumpy revenue recognition quarter over quarter.

Carol Craig: Our contracts are made up of a mix of material and labor expenses and those expenses can occur at different times over the life of a contract because of this quarterly comparisons are not necessarily indicative of expected annual results.

Carol Craig: We look at our revenue projections and gross margins on a year over year basis and expect that 2024 will demonstrate the importance of annual vice quarterly comparisons.

Bill White: And now I'll hand the call over to Bill to discuss our financial highlights.

Bill White: Thank you, Carol.

Bill White: It's a pleasure to be here today to discuss our second quarter 2024 financial results.

Bill White: As Carol mentioned, successfully launching Lizzy Sad into orbit was a major achievement for the company and a key milestone in our strategy to drive Sidus towards higher revenues and improve margins. As with any first time endeavor, we learned valuable lessons from the successful launch and deployment of our initial satellite.

Bill White: These insights have been applied to our current satellites and production, including Lizzy Sad II, which is scheduled for launch later this year.

Bill White: We are eager to see the advancements and improvements once these satellites are in orbit.

Bill White: As technology continues to evolve rapidly, we are committed to enhancing our own capabilities to expand our customer base and optimize our data revenue streams as part of our growing business portfolio.

Bill White: In addition to technology, we have invested in the growth of our company through capital expenditures on satellites, research and development and the implementation of a robust ERP system.

Bill White: Now on to our second quarter, 2024 financial results.

Bill White: Total revenue for the three months ended June 30, 2024 was just under 1 million and decrease of approximately 440,000 compared to total revenue for the three months ended June 30, 2023. This decrease was primarily driven by the timing of fixed price milestone contracts.

Bill White: Your satellite related revenue payments in the first half of 2024 and delay timing of expected contract awards, including those tied to related party contracts.

Bill White: Cost of revenue increased 105% for the three months ended June 30, 2024 to approximately 1.8 million as compared to 860,000 for the three months ended June 30, 2023. The increase was primarily driven by our mix of contracts with higher material expenses, vice labor shifts and milestone payments for our higher margin satellite related businesses and higher depreciation costs associated with the monthly depreciation of our first satellite asset deployed March 2024.

Bill White: Appreciation will continue to impact cost of revenue until we can generate a higher volume of satellite and data related revenues which have high margins to assess the related depreciation expense.

Bill White: Our growth profit for the quarter ended June 30, 2024 decreased approximately 1.35 million, resulting in a net loss of approximately 841,000 compared to a growth profit of approximately 508,000 for the three months ended June 30, 2023. First profit margin was negative 91% for the second quarter 2024 is compared to a positive 37% for the second quarter 2023. Again, this was driven by the timing of satellite related payments and fixed price milestone contracts in the first half of 2024 and higher costs related to the depreciation of our first satellite asset.

Bill White: SGNA expenses for the first quarter June 30, 2024 totaled approximately 3.1 million as compared to 3.6 million for the same period last year. The $500,000 decrease was primarily due to a reduction in payroll and related expenses directly related to building our satellites which were moved to fixed assets.

Bill White: D&O insurance expense and marketing and investor relation expenses also decreased.

Bill White: To provide investors with additional information and connection with our results as it's determined in accordance with GAP, we also include in our 2023 form 10K non-GAP measures to determine our adjusted EBITDA.

Bill White: We use adjusted EBITDA to evaluate our operating performance to make strategic decisions about the company's future corrections.

Bill White: Agency. Adjusted EBITDA loss, a non-GAP measure for the 3-month end of June 30, 2024, total $3.2 million, as compared to an adjusted EBITDA loss of $2.8 million for the same period last year. Total non-GAP adjustments for interest expense, depreciation and amortization, acquisition deal costs, severance costs, capital markets and advisory fees, equity-based compensation and amort costs are provided in the reconciliation table, listed in our second quarter of 2024 earnings PR released earlier today.

Bill White: NetLost for the 3-month end of June 30, 2024 was $4.1 million as compared to a net loss of $3.5 million for the same period last year.

Bill White: Turning to the ballot sheet as of June 30, 2024, the company had cash of $1.4 million as compared to $1.2 million at December 31, 2023.

Bill White: As we continue to manage our cash flow conservatively, we will prioritize the ptqs of our cash resources to pay down debt and fund our upcoming satellite builds with our crucial for driving revenue and overall growth and profitability.

Bill White: We will also continue to identify additional opportunities to reduce expenses and increase efficiencies within our business.

Carol Craig: But that will hand the call back over to Carol.

Carol Craig: Thank you, Bill.

Carol Craig: With over five months of living with that operating in orbit, side is facing entering an exciting phase of growth as we continue to execute our strategic priorities.

Carol Craig: Our 3D printed AI enhanced living with that are central to our future high-margin data service business model designed to integrate multiple technologies.

Carol Craig: These satellites enable simultaneous data collection that can support industries such as agriculture, maritime, oil and gas among others.

Carol Craig: We are committed to expanding further into these sectors to generate additional revenue, ultimately increasing value for our shareholders.

Carol Craig: Our next two satellites are in advance stages of production and are scheduled for launch within the next 6-9 months. We are diligently executing our plan to build a unique multi-mission constellation and the proactive steps we took early on, such as securing a multi-launch agreement with SpaceX and purchasing subsystems with long lead times, are enabling us to deliver a steady cadence of launches to meet the customer demand that we promised.

Carol Craig: The success we've already achieved with our very first satellite has strengthened the confidence of our team, industry partners, current potential customers and shareholders alike.

Carol Craig: I want to express my sincere gratitude to all our shareholders for your continued support of SIDAS.

Carol Craig: Whether you've been with us from the beginning or have recently joined, you are an integral part of our journey as we create unprecedented access to space.

Carol Craig: I remain fully committed to restoring shareholder value and am optimistic about the higher revenue streams we anticipate from our satellite manufacturing and our space data as a service constellation.

Carol Craig: Thank you to everyone for joining us today for SIDAS Space's second quarter, 2024 earnings conference call.

Operator: I will now ask the operator to close the line.

Operator: This concludes today's conference and you may disconnect your line at this time.

Operator: Thank you for your participation.

Unknown Attendee: [inaudible] a lot of work to do.

Unknown Attendee: She's got a lot of work to do.