Next question is, are there any significant operational challenges or successes that influenced financial results? So of course, getting the first LS approved for flight by SpaceX and the regulatory bodies is always the hardest and most costly. So now that we’ve successfully launched, deployed, currently operating LS-1 satellite, that NRE again associated with getting approval is significantly reduced for the subsequent missions. On the manufacturing front, we continue to manage through supply chain challenges and higher prices. Through a mix of contracts and increased satellite related revenue, we were able to more than offset the supply chain challenges and achieve a 28% overall gross margin versus 2022, which was 20%.
Bill White: 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.
Carol Craig: 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.
