Airship AI Holdings, Inc S-1, filed Aug 7, 2024

Airship AI Holdings, Inc. (AISP)

S-1 2024-08-07

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Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

	Per Share and Common Warrant	Total
Public offering price⁽¹⁾	$	$
Placement agents fees⁽²⁾	$	$
Proceeds to us, before expenses⁽³⁾	$	$

(1)	The public offering price corresponds to (i) a public offering price per share of $ and (ii) a public offering price per common warrant of $0.01.
(2)	We have agreed to pay the placement agents a cash placement commission equal to 7.0% of the aggregate proceeds from this offering. We have also agreed to reimburse the placement agents for certain expenses incurred in connection with this offering. See “Plan of Distribution” for additional information about the compensation payable to the placement agents.
(3)	Because there is no minimum number of securities or amount of proceeds required as a condition to closing in this offering, the actual public offering amount, placement agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering amounts set forth above. We estimate the total expenses of this offering payable by us, excluding the placement agent fees, will be approximately $ .

ABOUT THIS PROSPECTUS		2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		3

PROSPECTUS SUMMARY		4

THE OFFERING		8

RISK FACTORS		10

USE OF PROCEEDS		32

CAPITALIZATION		33

DILUTION		34

MARKET INFORMATION OF OUR SECURITIES		35

DESCRIPTION OF SECURITIES BEING OFFERED		36

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		38

DESCRIPTION OF AIRSHIP AI’S BUSINESS		47

DIRECTORS AND EXECUTIVE OFFICERS		54

EXECUTIVE COMPENSATION		60

BENEFICIAL OWNERSHIP OF SECURITIES		67

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE		69

DESCRIPTION OF OUR SECURITIES		73

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS		85

PLAN OF DISTRIBUTION		90

EXPERTS		92

LEGAL MATTERS		92

WHERE YOU CAN FIND MORE INFORMATION		92

INDEX TO FINANCIAL STATEMENTS		F-1

	·	changes in the competitive industries and markets in which we operate or plan to operate;

	·	changes in applicable laws or regulations affecting our business;

	·	our ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities;

	·	risks related to our potential inability to achieve or maintain profitability and generate significant revenue;

	·	current and future conditions in the global economy, including as a result of economic uncertainty, and its impact on us, our business and the markets in which we operate;

	·	our potential inability to manage growth effectively;

	·	our ability to recruit, train and retain qualified personnel;

	·	estimates for the prospects and financial performance of our business may prove to be incorrect or materially different from actual results;

	·	risks related to our marketing and growth strategies;

	·	the effects of competition on our business;

	·	expectations with respect to future operating and financial performance and growth, including when we will generate positive cash flow from operations; and

	·	our ability to raise funding on reasonable terms as necessary to develop our products in the timeframe contemplated by our business plan.

Risk Factors Summary Investing in our securities involves risks. You should carefully consider the risks described in “Risk Factors” before making a decision to invest in our securities. If any of these risks actually occurs, our business, financial condition and results of operations would likely be materially adversely affected. In such case, the trading price of our securities would likely decline, and you may lose all or part of your investment. Set forth below is a summary of some of the principal risks we face: Risks Related to Airship AI’s Business and Industry

	·	The market for Airship AI’s edge AI services and products is relatively new, and may decline or experience limited growth, and Airship AI’s business is dependent on its clients’ continuing adoption and use its services and products.

	·	Airship AI’s sales efforts involve considerable time and expense and its sales cycle is often long and unpredictable.

	·	Historically, existing customers have expanded their relationships with Airship AI, which has resulted in a limited number of customers accounting for a substantial portion of its revenue.

	·	If Airship AI does not successfully develop and deploy new technologies to address the needs of its customers, its business and results of operations could suffer.

	·	Issues raised by the use of artificial intelligence (“AI”) (including machine learning) in Airship AI’s platforms may result in reputational harm or liability.

	·	Real or perceived errors, failures, defects, or bugs in Airship AI’s platforms could adversely affect its results of operations and growth prospects.

	·	Airship AI may not be able to adequately protect or enforce its intellectual property rights or prevent unauthorized parties from copying or reverse engineering its solutions.

	·	Airship AI has not been consistently profitable in the past and may not achieve or maintain profitability in the future.

	·	Airship AI requires substantial additional funding, which may not be available to Airship AI on acceptable terms, or at all.

	·	Unavailability of materials or higher costs could adversely affect Airship AI’s financial results.

	·	If Airship AI’s security measures are breached or fail and unauthorized access is obtained to a customer’s data, our service may be perceived as insecure, the attractiveness of its services to current or potential customers may be reduced, and Airship AI may incur significant liabilities.

	·	Airship AI depends on its management team and other key employees and the ability to attract and retain highly skilled employees.

	·	Airship AI’s management team has limited experience managing a public company and regulatory compliance may divert their attention from the day-to-day management of Airship AI’s business.

	·	Airship AI’s business depends, in part, on sales to government organizations, and significant changes in the contracting or fiscal policies of such government organizations could have an adverse effect on Airship AI’s business and operating results.

	·	If Airship AI fails to maintain effective internal control over financial reporting or identify a material weakness or significant deficiency in its internal control over financial reporting, Airship AI’s ability to report its financial condition and results of operations in a timely and accurate manner could be adversely affected, investor confidence in Airship AI company could diminish, and the value of its stock may decline.

	·	Airship AI could be subject to additional tax liabilities

Risks Related to Our Securities

	·	There may not be enough liquidity in our securities to enable securityholders to sell their securities.

	·	The market price of our equity securities may be volatile, and you could lose a significant part of your investment.

	·	Our executive officers and directors exercise significant control over us, which will limit your ability to influence corporate matters and could delay or prevent a change in corporate control.

	·	The requirements of being a public company may strain the Company’s resources and distract management and we will incur substantial costs as a result of being a public company.

	·	We do not intend to pay any cash dividends in the foreseeable future.

	·	f our shares become subject to the penny stock rules, it would become more difficult to trade our shares.

Risks Related to This Offering

	·	We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

	·	You will experience immediate and substantial dilution in the net tangible book value per share of the common stock you purchase. You may also experience future dilution as a result of future equity offerings.

	·	Resales of our common stock in the public market during this offering by our stockholders may cause the market price of our common stock to fall.

	·	This offering may cause the trading price of our common stock to decrease.

Issuer		Airship AI Holdings, Inc.

Common Stock to be Offered	Up to 2,717,391 shares of common stock, assuming the sale of our common stock and common warrants at an assumed combined public offering price of $3.68 per share and common warrant (the last reported sale price per share of our common stock on The Nasdaq Global Market on August 1, 2024).

Common Warrants to be Offered	Common warrants to purchase up to 2,717,391 shares of our common stock. Each common warrant has an exercise price of $ per share of common stock and is immediately exercisable and will expire five years from the date of the issuance. The shares of common stock and the accompanying common warrants can only be purchased together in this offering but will be issued separately and will be immediately separable upon issuance. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the common warrants.

Common Stock Outstanding Before this Offering	23,736,027

Common Stock to be Outstanding Immediately After this Offering	26,453,418 (assuming no exercise of the common warrants being offered)

Use of Proceeds	Assuming the maximum shares of common stock and common warrants are purchased as part of this best efforts offering, we estimate that the net proceeds from this offering will be approximately $8.9 million, after deducting estimated placement agent fees and estimated offering expenses payable by us. We currently intend to use the net proceeds from this offering for working capital and general corporate purposes. See “Use of Proceeds” for additional information.

Placement Agent’s Warrants	The registration statement of which this prospectus is a part also registers for sale warrants (the “Placement Agent’s Warrants”) to purchase shares of common stock (equal to 10% of the number of shares of common stock sold in this offering) to Roth Capital Partners, LLC (“Roth”), as a portion of the compensation payable to Roth in connection with this offering. The Placement Agent’s Warrants will be immediately exercisable at an exercise price of $ (100% of the public offering price for the shares of common stock and common warrants offered hereby) and expire on the fifth anniversary of the commencement of sales of this offering. See “Plan of Distribution” section on page 90.

Risk Factors	An investment in our securities involves a high degree of risk. See “Risk Factors” beginning on page 10 of this prospectus and the other information included in this prospectus for a discussion of the risk factors you should carefully consider before deciding to invest in our securities.

Nasdaq Symbols	Our common stock is listed on The Nasdaq Global Market under the symbol “AISP” and our public warrants are listed on The Nasdaq Capital Market under the symbol “AISPW.” There is no established public trading market for the common warrants being offered, and we do not expect a market to develop. In addition, we do not intend to apply to list the common warrants on any national securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the common warrants will be limited.

The above discussion is based on 23,736,027 shares of our common stock outstanding as of August 1, 2024, and excludes the common warrants being sold in this offering and, as of that date, the following:

	·	4,895,141 shares of common stock issuable upon the exercise of stock options outstanding at a weighted average exercise price of $0.98 per share;

	·	3,931,241 shares of common stock reserved for future grants of equity-based awards under our equity incentive plan;

	·	16,159,012 shares of common stock issuable upon the exercise of public warrants at an exercise price of $7.80 per share;

	·	515,000 shares of common stock issuable upon the exercise of private placement warrants at an exercise price of $7.80 per share;

	·	2,689,902 shares of common stock issuable upon the exercise of warrants at an exercise price of $1.77 per share;

	·	1,758,105 shares of common stock underlying stock appreciation rights with a base value of $0.12 per share; and

	·	931,794 shares of common stock issuable upon the conversion of convertible debentures at an assumed conversion price of $2.275 per share.

	·	the fiscal year end procurement cycle of our government customers, and in particular U.S. government customers which have a fiscal year end of September 30;

	·	the fiscal year budgeting process for our commercial customers, many of which have a fiscal year end of December 31;

	·	seasonal reductions in business activity during the summer months in the United States, Europe, and certain other regions; and

	·	timing of projects and our customers’ evaluation of our work progress.

	·	our failure to predict market demand accurately in terms of product functionality and to supply offerings that meet this demand in a timely fashion;

	·	product defects, errors, or failures or our inability to satisfy customer service level requirements;

	·	negative publicity or negative private statements about the security, performance, or effectiveness of our platforms or product enhancements;

	·	delays in releasing to the market our new offerings or enhancements to our existing offerings, including new product modules;

	·	introduction or anticipated introduction of competing platforms or functionalities by our competitors;

	·	inability of our platforms or product enhancements to scale and perform to meet customer demands;

	·	receiving qualified or adverse opinions in connection with security or penetration testing, certifications or audits, such as those related to IT controls and security standards and frameworks or compliance;

	·	poor business conditions for our customers, causing them to delay software purchases;

	·	reluctance of customers to purchase proprietary software products;

	·	reluctance of our customers to purchase products hosted by our vendors and/or service interruption from such providers; and

	·	reluctance of customers to purchase products incorporating open source software.

	·	be time-consuming and expensive to defend, whether meritorious or not;

	·	require us to stop providing products or services that use the technology that allegedly infringes the other party’s intellectual property;

	·	divert the attention of our technical and managerial resources;

	·	require us to enter into royalty or licensing agreements with third-parties, which may not be available on terms that we deem acceptable;

	·	prevent us from operating all or a portion of our business or force us to redesign our products, services or technology platforms, which could be difficult and expensive and may make the performance or value of our product or service offerings less attractive;

	·	subject us to significant liability for damages or result in significant settlement payments; or

	·	require us to indemnify our customers.

	·	selling to governmental agencies can be highly competitive, expensive and time consuming, often requiring significant upfront time and expense without any assurance that such efforts will generate a sale;

	·	government certification requirements applicable to our platform may change and, in doing so, restrict our ability to sell into the governmental sector until we have attained the revised certification;

	·	government demand and payment for our platform may be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our platform; and

	·	governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit could result in the government refusing to continue buying our platform, which would adversely impact our revenue and operating results.

	·	inability to integrate or benefit from acquired technologies, products, personnel or services in a profitable manner;

	·	unanticipated costs or liabilities associated with the acquisition, including potential liabilities due to litigation and potential identified or unknown security vulnerabilities in acquired technologies that expose us to additional security risks or delay our ability to integrate the product into our offerings or recognize the benefits of our investment;

	·	differences between our values and those of an acquired company, as well as potential disruptions to our workplace culture;

	·	incurrence of acquisition-related costs, including costs related to integration activities;

	·	difficulty integrating the accounting and information systems, operations, and personnel of the acquired business;

	·	augmenting the acquired technologies and platforms to the levels that are consistent with our brand and reputation;

	·	difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business;

	·	challenges converting the acquired company’s revenue recognition policies and forecasting the related revenues, including subscription-based revenues and software license revenues;

	·	potential write-offs of acquired assets or investments, and potential financial and credit risks associated with acquired customers;

	·	difficulty converting the customers of the acquired business onto our platform and contract terms;

	·	diversion of management’s attention and other company resources;

	·	harm to our existing business relationships with business partners and customers as a result of the acquisition;

	·	the potential loss of key employees;

	·	use of resources that are needed in other parts of our business; and

	·	use of substantial portions of our available cash to consummate the acquisition.

	·	the common stock being offered under this prospectus (excluding the shares underlying the common warrants) represents approximately 11.4% of the shares of common stock outstanding as of August 1, 2024, and sales of a significant number of such shares could materially adversely affect the trading prices of our securities;

	·	the realization of any of the risk factors presented in this prospectus;

	·	the concentration of the ownership of our shares by a limited number of affiliated stockholders may limit interest in our securities;

	·	limited “public float” with a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for the common stock;

	·	additions or departures of key personnel;

	·	loss of a strategic relationship;

	·	variations in operating results from the expectations of securities analysts or investors;

	·	announcements of new products or services by us or our competitors;

	·	reductions in the market share of our products;

	·	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

	·	investor perception of our industry or prospects;

	·	insider selling or buying;

	·	investors entering into short sale contracts;

	·	regulatory developments affecting our industry;

	·	changes in our industry;

	·	competitive pricing pressures;

	·	our ability to obtain working capital financing;

	·	our ability to execute our business plan;

	·	operating results that fall below expectations;

	·	revisions in securities analysts’ estimates or reductions in security analysts’ coverage; and

	·	economic and other external factors.

	·	the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquiror;

	·	the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director, which may prevent stockholders from being able to fill vacancies on our board of directors;

	·	the requirement that a special meeting of stockholders may be called only by our board of directors or the chairman of the board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

	$
Working capital, including cost of goods sold purchases	$	4,000,000
Personnel and product development, including AI development		2,000,000
Reduction of liabilities		2,900,000
Net proceeds	$	8,900,000

	·	on an actual basis; and

	·	on an as adjusted basis to reflect the issuance and sale of shares of common stock and common warrants in this offering, after deducting estimated placement agent fees and estimated offering expenses payable by us.

	March 31, 2024
	Actual			Pro Forma
	(Unaudited)			(Unaudited)
Cash and cash equivalents	$	1,726		$	10,626

Senior Secured Convertible Promissory Notes	$	4,205		$	4,205
Warrant liability		7,515			7,515
Earnout liability		26,618			26,618
	$	38,338		$	38,338

STOCKHOLDERS' EQUITY
Common stock	$	2		$	2
Additional paid in capital		1,398			10,298
Accumulated deficit		(49,441	)		(49,441	)
Accumulated other comprehensive loss		(10	)		(10	)
Total stockholders' deficit	$	(48,051	)	$	(39,151	)
Total capitalization	$	(9,713	)	$	(813	)

	·	5,114,589 shares of common stock issuable upon the exercise of stock options outstanding at a weighted average exercise price of $0.86 per share;

	·	3,931,241 shares of common stock reserved for future grants of equity-based awards under our equity incentive plan;

	·	16,159,112 shares of common stock issuable upon the exercise of public warrants at an exercise price of $7.80 per share;

	·	515,000 shares of common stock issuable upon the exercise of private placement warrants at an exercise price of $7.80 per share;

	·	2,689,902 shares of common stock issuable upon the exercise of warrants at an exercise price of $1.77 per share;

	·	1,758,105 shares of common stock underlying stock appreciation rights with a base value of $0.12 per share; and

	·	931,794 shares of common stock issuable upon the conversion of convertible debentures at an assumed conversion price of $2.275 per share.

Assumed public offering price per share				$	3.68
Net tangible book value per share as of March 31, 2024	$	(2.07	)
Increase in net tangible book value per share attributable to this offering	$	0.56
Pro forma as adjusted net tangible book value per share after this offering				$	(1.51	)
Amount of dilution in net tangible book value per share to new investors in this offering				$	5.19

	Liability as of
	March 31, 2024⁽¹⁾

Earnout liability	$	26,618,278
Senior Secured Convertible Promissory Notes		4,204,743
Warrant liability (Public Warrants)		7,311,998
Warrant liability (Private Warrants)		203,078
Total liabilities measured at fair value	$	38,338,097

Other expense related to instruments recorded at fair value during the three months ended March 31, 2024	$	30,371,318

	Liability as of
	December 31, 2023⁽²⁾

Earnout liability	$	5,133,428
Senior Secured Convertible Promissory Notes		2,825,366
Warrant liability (Public Warrants)		646,428
Warrant liability (Private Warrants)		21,557
Total liabilities measured at fair value	$	8,626,779

	·	Growth within existing government customers. While we currently have a strong footprint across multiple large U.S. government agencies, growing our business within these agencies outside of the investigation focused departments is a fundamental area of our projected growth. Our ability to expand our footprint by implementing AI based solutions that leverage our core existing competencies within the agencies will be a critical indicator of the success of this strategy. We will measure progress against this objective through the disclosure of awards for new business within these agencies during the affected timeframe, providing tangible evidence of the success of our strategy to both management and investors alike.

	·	Greater penetration into the commercial marketplace. While we have several existing customers in the commercial marketplace, our ability to build on the solutions we provide those customers and expand that base will be critical to our projected growth objectives. We will measure progress against this objective through the disclosure of the number of new commercial customers added during the affected timeframe, providing tangible evidence of the success of our strategy to both management and investors alike.

	·	Expansion of our edge AI based solutions. We began to sell AI based solutions in late 2022. Our current strategy is highly focused on the transition of data management and analysis workloads to the edge, driving efficiency and cost savings for our customers. This strategy also includes new models being trained to extract data at the edge which enables real-time intelligent decision making for our customers. We will measure progress against this objective through the disclosure of the numbers of edge AI hardware devices we are selling as well as the growth of our edge AI analytic capabilities, providing tangible evidence of the success of our strategy to both management and investors alike.

	·	Increase in the sales of lower margin solutions as we expand our operational footprint. While our current focus remains on expanding our AI driven software application portfolio, opportunities will continue to present themselves to provide those software-based solutions as part of a larger hardware-based turn-key solutions where Airship AI can provide a unique value-add to the customer. While these solutions will positively affect revenue we anticipate our operating profits in future periods may be adversely affected as compared to previous years due to the lower operating margin for hardware versus software applications.

	·	Challenges due to geo-political driven supply-chain constraints. While many of the COVID-19 driven supply chain issues have been resolved, challenges to the timely production and delivery of Taiwan based products we utilize for our edge AI platform due to geo-political factors is a concern looking forward. In the event that our suppliers are unable to provide timely delivery of those supplies it will significantly impact our ability to meet delivery schedules for existing and anticipated edge AI hardware-based solutions.

	·	Near-term impacts due to merger and acquisition activity. If Airship AI merges with or acquires another company, it is reasonably expected that there will be increased operating expenses and costs associated with the merger that could negatively impact operating profits in the future periods immediately following the M&A event. The extent and longevity of those impacts is not possible to quantify.

	Three Months Ended March 31,
	2024			2023			$ Variance			% Variance

Net revenues	$	10,575		$	2,939		$	7,636			259.8	%
Cost of net revenues		7,947			2,135			(5,812	)		-272.2	%
Gross profit		2,628			804			1,824			226.9	%
Research and development expenses		695			674			(21	)		-3.1	%
Selling, general and administrative expenses		3,335			1,832			(1,503	)		-82.0	%
Total operating expenses		4,030			2,506			(1,524	)		-60.8	%
Operating loss		(1,402	)		(1,702	)		300			17.6	%
Other income (expense):
Loss from change in fair value of warrants		(6,847	)		-			(6,847	)		-100.0	%
Loss from change in fair value of earnout liability		(21,485	)		-			(21,485	)		-100.0	%
Loss from change in fair value of convertible debt		(2,039	)		-			(2,039	)		-100.0	%
Loss on note conversion		(159	)		-			(159	)		-100.0	%
Interest expense		(32	)		(5	)		(27	)		-540.0	%
Other expense		-			(5	)		5			100.0	%
Total other expense, net		(30,562	)		(10	)		(30,552	)		305520.0	%
Loss before income taxes		(31,964	)		(1,712	)		(30,252	)		-1767.1	%
Income tax benefit (expense)		-			-			-			-
Net loss	$	(31,964	)	$	(1,712	)	$	(30,252	)		-1767.1	%

	Year Ended December 31,
	2023			2022			$ Variance			% Variance

Net revenues	$	12,300		$	14,549		$	(2,249	)		-15.5	%
Cost of net revenues		6,536			6,128			(408	)		-6.7	%
Gross profit		5,764			8,421			(2,657	)		-31.6	%
Research and development expenses		2,729			3,615			886			24.5	%
Selling, general and administrative expenses		9,675			7,630			(2,045	)		-26.8	%
Total operating expenses		12,404			11,245			(1,159	)		-10.3	%
Operating loss		(6,640	)		(2,824	)		(3,816	)		-135.1	%
Other income (expense):
Gain from change in fair value of warrants		1,341			-			1,341			100.0	%
Gain from change in fair value of earnout liability		21,977			-			21,977			100.0	%
Loss from change in fair value of convertible debt		(241	)		-			(241	)		-100.0	%
Interest income		-			43			(43	)		-100.0	%
Interest expense		(56	)		(75	)		19			25.3	%
Other expense		(10	)		-			(10	)		-100.0	%
Other income- PPP loan forgiveness		-			1,146			(1,146	)		-100.0	%
Other income- Employee retention tax credit		-			1,233			(1,233	)		-100.0	%
Total other income, net		23,011			2,347			20,664			880.4	%
Income (loss) before income taxes		16,371			(477	)		16,848			3532.1	%
Income tax benefit (expense)		-			(10	)		10			100.0	%
Net income (loss)	$	16,371		$	(487	)	$	16,858			3461.3	%

			Less Than
Contractual Cash Obligations	Total		1 Year		1-3 Years		4-5 Years
Operating lease cash payments	$	1,382,081	$	424,158	$	735,332	$	222,591

	·	Structure data and analyze it in real-time,

	·	Extract value from the analyzed data in real-time,

	·	Securely transmit the usable data to the consumers who need it in real-time, and

	·	Securely retain all data at the edge for regulatory/evidentiary purposes.

	·	Acropolis Commercial. We built this platform first, supporting a variety of small and medium businesses across various commercial verticals, including schools, hospitals, casinos, logistics, and retail establishments. Our growth led us to larger commercial entities where we branched out from a standalone platform managing small numbers of cameras to an enterprise platform capable of managing hundreds of thousands of cameras and users from a single graphical user interface. Acropolis Commercial continues to support our commercial customers’ requirements today.

	·	Acropolis Law. We built this platform based on the success of our commercial offering and we have grown our customer base to include agencies across the law enforcement, defense, and intelligence sectors, with dozens of custom sensor integrations and unique workflows allowing agencies to break down data sharing silos when operating standalone or in joint interagency environments.

	·	Single Pane of Glass Platform: Our platform brings together disparate edge generated data into one place, structured and unstructured, allowing our customers the ability to visualize multiple analyzed data forms in a true “single pane of glass.” This approach substantially reduces the infrastructure, human and physical, that has been historically needed to view and extract operational value from the customers’ data.

	·	Superior Customer Experience: Our direct approach to customer engagements enables our team to manage the entire customer experience, starting with the first platform demonstration and continuing through installation and long-term employment. This is key to our goal to build partnerships with our customers, which we equate to potential long-term recurring revenue engagements with strong opportunities for expansion within the organization.

	·	Ease of Use and Adoption: Our solution is architected such that it can be installed in as little as one hour with minimal direct engagement or support needed, yet ready to support operational engagements of a handful of users and devices to thousands of users and tens of thousands of attached devices. Everything within the architecture is purpose built to be intuitive and straightforward, allowing users to become operationally proficient in short order with limited training.

	·	Hardened and Secure Platform: As a U.S. owned and operated company, our offerings are compliant with the National Defense Authorization Act (“NDAA”), the Commercial Software and the Trade Agreements Act (“TAA”), and the Buy American Act. Thus, cybersecurity and safeguarding data at rest and in transit is factored into everything we do, resulting in our platform having been accredited with numerous Authorities to Operate (“ATO”) for U.S. government agencies for on-premise deployments as well at the Fed Ramp high impact level in the secure cloud. This allows us to bring government-grade security to the larger commercial sector.

	·	Significant Cost Savings: Our edge solution enables customers to add AI capabilities to their existing IT infrastructure, allowing them to immediately recognize the operational benefits of our AI platform without having to add expensive backend servers. Additionally, our open approach to edge sensors and devices allows customers to extract the full value out of their existing devices compared to the more common industry standard rip and replace approach.

	·	Embrace Existing Direct Routes to Market While Building A Channel Program: Our focus in the near term is to continue building and expanding relationships with existing customers who we enjoy direct relationships with, while we build partnerships with global integrators who bring capabilities outside our core competencies along with access and placement to customers and verticals which we do not currently enjoy. We believe that these strategies can not only co-exist but be mutually beneficial.

	·	Expand Our Technology Partnerships and Integrations: Our focus remains on providing a best of breed “single pane of glass” solution for our customers data management challenges, which entails expanding our existing technology partnership ecosystem within our existing customer framework, as well as adjacent verticals. We believe this will drive new customer acquisitions as well as help expand our distribution capability into spaces our partners already participate.

	·	Commercial Expansion: Based on our existing lighthouse customers and the rapid acceleration of AI in solving public safety and operational challenges, we see significant opportunities for expansion of our platform in the broader commercial marketplace. While we see opportunities across multiple industry verticals, our focus in the short term will be on those verticals that can immediately benefit from the work already done, significantly reducing additional development efforts along with shortening the sales cycle. These verticals include infrastructure, transportation, logistics, and retail.

	·	Strategic M&A Activities: As part of our commercial landing and government expansion strategies, we plan to focus on strategic acquisition targets with complementary technologies that can rapidly accelerate existing development efforts or add new capabilities to our platform that are supportive of our existing technology partnerships and routes to market strategies.