Greetings, and welcome to the Sidus Space Fourth Quarter and Full Year 2023 Results Conference Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Valter Pinto, Managing Director, KCSA. You may begin. Please proceed.

Good morning, everyone. And thank you for joining us for the Sidus Space fourth quarter and full year 2023 financial results conference call. Joining us today from the company is Carol Craig, Founder and Chief Executive Officer; and Bill White, Chief Financial Officer. During today's call, we may make 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, 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 Web site, www.sidusspace.com. Listeners are cautioned not to put any undue reliance on forward-looking statements. And the company specifically disclaims any obligation to update the forward-looking statements that may be discussed during this call. At the conclusion of our prepared remarks, we'll be answering questions submitted in advance. If we do not get to your question within the time frame allotted for this morning's call, please email our team at sidus@kcsa.com. At this time, I would like to turn the call over to Carol. Carol, please go ahead.

Thank you, Valter. And welcome, everyone. 2023 was a pivotal year for Sidus as we worked toward the launch of LizzieSat. Earlier this month, we successfully deployed from the SpaceX Transporter-10 Rideshare Mission followed by successful establishment of communications and retrieval of health and status data. LizzieSat-1 is the first of several satellites planned for launch to low earth orbit. We are quickly building our multi mission constellation of 3D printed AI enhanced satellites with two more LizzieSat manifested for launch with SpaceX before the end of this year. The steps we took to prepare since our IPO and through 2023 led us to the successful deployment of LizzieSat-1. The steps we took were both technical and organizational. We built a foundation for the future that included investment in people, processes and technology. We focused on critical areas that contributed to the success of our initial launch and deployment and at the same time to our strategic plan for the next several years. This includes development of simulation, guidance and navigation and flight software, and combined with our hardware innovations establishes a new line of products with flight heritage and experience. Integrating established design and processes related to environmental testing, redundancy of systems and agile development resulted in not only success right out of the gate the first time but also a rapid development capability that will allow us to grow and evolve as the space ecosystem grows and evolves. We streamlined and matured our leadership team and our Board of Directors with a focus on the long term outlook. This means bringing in leadership with the ability to connect, flex and grow as we look to capture more of both government and commercial markets benefiting from LEO, the Moon and Mars programs. 2023 also brought significant upgrades to our…

Thanks, Carol. And a good day to our shareholders, guests and listeners. It's a pleasure to be here today to discuss our fourth quarter and full year 2023 financial results and also provide an update on our business strategy. Launching LizzieSat-1 is a major step in executing our strategy of building high margin recurring space data as a service revenue streams from our satellite data. As Carol highlighted, by putting LizzieSat-1 into orbit, we have achieved the most difficult part of our long term strategy to shift the company towards greater revenues and higher margins. With LS-2 and LS-3 in production and manifested for launch this year, we are well on our way to establishing a multi satellite constellation to capture and sell satellite data as a service to our customer. To put it in perspective, each of our satellites are capable of downloading a minimum of 100,000 megabytes of data back to earth each day. This translates in our ability to theoretically generate $14 million in revenue per year per satellite, assuming we sell 100% of this data a single time. Interestingly, we may be able to sell this data multiple times. As you can imagine, this business model has the capacity to scale rapidly and generate meaningful cash flow as we develop a steady cadence of LizzieSats going into orbit. While we do have current data contracts in place, now that LS-1 is in orbit and fully operational, we are increasing our pipeline of new potential customers for our space data as a service. We recently hired a Vice President of Business Development to drive the sales process. Now to our 2023 financial results. Total revenue for the 12 months ended December 31, 2023, totaled approximately $6 million, a decrease of $1.3 million compared to total revenue for…

Thank you, Bill. The launch of LS-1 marks the beginning of a new era for Sidus. Our 3D printed AI enhanced LizzieSats are at the core of our high margin data as a service business model with the capability to integrate multiple technologies into a single satellite. Our satellites facilitate simultaneous data collection to support agriculture, maritime, oil and gas, and other industries, and we intend to expand into these industries to generate additional revenue for our shareholders. We have big plans for 2024 as we are quickly building our constellation of satellites with two more LizzieSat manifested for launch with SpaceX on their Bandwagon mission before the end of the year. With LS-1 in orbit and LS-2 and 3 in projection, we're focusing attracting new data customers to expand our data as a service business. Additionally, we're looking at expanding our other lines of business as we focus on more than just lower earth orbit. We expect the next 24 months to demonstrate our focus on remaining lean as we grow revenue and capabilities with a plan for rapid response development of space solutions for all areas of the space ecosystem. Successfully designing, building, launching and deploying an operational 100 kilogram 3D printed satellite is not an easy feat and there are very few companies who get to this level. I could not be more proud of our team and all we have accomplished. We have methodically executed on our strategy of building a leading space and space data as a service company with an experienced team, innovative and advanced technologies, a vertically integrated manufacturing facility and a robust spacecraft supply chain. It's exciting to show proof of this capability for both our customers and our shareholders. We have much to do and we're looking forward to the future as we continue to execute on our vision and bring value to our shareholders, our customers and the world. I want to thank all of our shareholders for your continued support of Sidus. And we will now move to the Q&A portion of the call. We've received some submitted questions from investors that we'd like to address. Bill, I'll let you start.

Thank you, Carol. The first question was with respect to revenue and growth. What were the key drivers behind the revenue decline this year? The primary drivers was the function of our milestone contract billings and the timing of those billings for manufacturing and satellite revenue. Second question, how do you anticipate revenue trends evolving in the next quarter or fiscal year? While revenue will evolve as we continue to have more satellites in orbit, we've talked about our three revenue streams, manufacturing, payload and data. While we've had manufacturing and payload revenue in 2022 and 2023, we anticipate to start seeing some satellite data revenue in 2024 as we continue our planned launch cadence. Payload and data are higher margin and are expected to favorably impact our overall results.

Thanks, Bill. So the next question is what strategies are you employing to acquire and retain customers in an increasingly competitive market? So our number one strategy was demonstrating that we could successfully launch, deploy and operate a 100 kilogram commercial satellite. The significance being the complexity of the satellite, because of the size and the fact that it's commercial endeavor, and therefore, we control the revenue generation in addition to all the operations at the upcoming constellation. Also as Bill mentioned, we hired VP of Business Development with an increased focus on government opportunities now that we've flown. We expect more government opportunities over the next year due to the timing of existing contracting vehicles that are out there and also because of the successful execution of our satellite manufacturing and operating capability. And this also means an increased pipeline for data as well as the manufacturing with additional focus on engineering services. And then of course, we're attending the industry event, Satellite 2024 was attended in March and an upcoming ESA Space Symposium in April. And all of these combined are helping us to increase our pipeline and work toward acquiring more and retaining those customers. Next question is, are there any notable customer wins or expansions during the reporting period? So we did announce that we are one of the teams that was selected by the National Geospatial Intelligence Agency, NGA, to provide research and development services to their research and development directorate. And the NGA's primary mission is collecting, analyzing and distributing geospatial intelligence in support of national security. And that contract is expected to start to gain some momentum and we will be bidding on task orders as a part of that team upcoming in the -- in 2024. We also signed a commercial IDIQ…

The next question has to do with the financial health and capital allocations. The question is, can you discuss the company's liquidity position and any measures taken to manage cash flow effectively? The company's growing concern was removed from our 10-K indicating that we have sufficient liquidity to operate for at least the next 12 months. The next question is, what is the company's approach to managing debt and leverage in the current market environment? The company has historically operated on a very tight budget and has raised a fraction of the capital in some of our competitors. We will continue to operate efficiently and effectively. How do you plan to deploy capital in the coming quarters? Any update on investment plans or acquisitions? We have no immediate M&A plans but are always looking for accretive strategic investments.

So next question is related to competitive landscape, which is always one of my favorite. How do you view the competitive landscape in the satellite services industry and how is the company positioned relative to competitors? So last year, 2,860 satellites were launched, 79% of those were communication related and only 13% were remote sensing like ours. And out of those, 2,116 were for SpaceX and OneWeb related to comms. In the remote sensing and earth observation market, most of the companies seem to be focused on one type of sensor or industry, and we built LizzieSat to be a flexible and dynamic platform to allow for multiple technologies and rapid integration of new and emerging technologies. This allows us to pivot when needed to address emerging industry or customer needs more rapidly. Also most, if not of all, of our competitors in the public market went public via [SPAC] and have some significant overhead. As we launch more satellites, we will see our losses reduced because of the invested NRE that I mentioned previously and the lean operating structure that we've created. Additionally, governments are moving more towards commercial models and looking to industry to build and operate their own satellites and provide data as opposed to paying contractors to build a government owned satellite. This means that there's more opportunity for companies like ours who are building satellites that are larger than the typical CubeSats and doing at lower cost than many of our competitors. So how do we define a successful mission? Each mission has different objectives. But for LS-1, we were initially looking at three main and those were the successful launch, successful separation and deployment and then establishing two way communication so we can monitor health and status of satellite, and we achieved those. And the fourth is collecting data and that's where we're moving into right now. And we're focused on the successful collection of data and therefore the revenue generation that comes out of LS-1. Next question is, what recent technological advancements or innovations have contributed to the company's competitive advantage? And I mentioned this before, one of them is the acquisition of Exo-Space, the AI company. Integrating onboard software and hardware AI solutions is critical to maximizing revenue generation. Another question is how do you plan to leverage emerging technologies, for example, small satellites or advanced analytics to drive future growth? One thing we're focused on is increasing our onboard computing speed using [VPX] technology, also leveraging software defined radios and modularizing the control and data handling subsystems to reduce complexity and mass while improving our computing speed. And what this does is it reduces the total time required from receipt of that critical data onboard LizzieSat to the time that its downlinked and transferred to customers, which means more revenue generation. And I'll pass it back to Bill for our last question.

Last question is, can you provide any visibility into future revenues and earnings growth expectations? We're an emerging growth company and we currently don't provide guidance. But with LizzieSat-1 now in orbit, our sales team is aggressively pursuing additional data contracts. We have a plan for a steady cadence. Most other companies our size have had a gap between their first mission and subsequent missions. LizzieSat-2 and 3 are in production and currently on schedule for manifested launch in Q4 of this year. LizzieSat-4 is manifested for Q1 of 2025 and LizzieSat-5 and 6 are in the design phase currently. This means continued revenue growth from satellite operations and as mentioned with less nonrecurring engineering and other costs that was incurred over the last two years as we built our first and deployed our first LizzieSat-1.

Thank you, Bill. And thank you to everyone who submitted questions. Lastly, thank you to all of you for joining us today for Sidus Space's fourth quarter and full year 2023 earnings conference call.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.