Airship AI Holdings, Inc. (NASDAQ: AISP) (“Airship AI” or the
“Company”), a leader in AI-driven video, sensor, and data
management surveillance solutions, today reported its financial and
operational results for the full year ended December 31, 2023.
On December 21, 2023, the Company closed the
merger with BYTE Acquisition Corp. (“BYTS”), BYTE Merger Sub, Inc.,
a Washington corporation and a direct, wholly-owned subsidiary of
BYTS, and Airship AI, Inc., a Washington corporation.
FY 2023 & Subsequent 2024
Operational Highlights
- Backlog of approximately $11.8
million including orders received late in the second half of 2023
that will be delivered and invoiced across Q1 and Q2 of 2024.
- Validated pipeline of approximately
$140 million into 2024, including opportunities that rolled over
from 2023, consisting of single and multi-year opportunities for
AI-driven edge, video, and sensor and data management platform
across all our customer verticals.
- Awarded a six-figure multi-year
software and services contract by an agency within the Singapore
government for the Company’s Acropolis Enterprise Sensor Management
video and data management platform supporting emerging public
safety requirements.
- Awarded a large contract by an
agency within the U.S. Department of Justice (“DOJ”) for the
Company’s Acropolis Enterprise Sensor Management video and data
management platform supporting emerging public safety and
investigative requirements.
- Began delivery of multiple firm
fixed price contracts worth $10.9 million, awarded in September
2023 by an agency within the U.S. Department of Homeland Security
(“DHS”), for advanced integrated solutions supporting real-time
intelligence collection operations along the United States’
borders, leveraging the Company’s edge IoT appliance, Outpost
AI.
- Business combination strategically
positions Airship AI, a robust AI-driven video, sensor and data
management surveillance platform for government agencies and
enterprises, to accelerate growth and revenue.
- Net revenues for the year ended
December 31, 2023 were $12.3 million.
- Gross profit for the year ended
December 31, 2023 was $5.8 million.
- Gross margin percentage was 47% for
the year ended December 31, 2023, primarily due to a higher
percentage of third-party hardware sales as part of turn-key
solution bundled by Airship AI with Outpost AI included.
- Operating loss was $6.6 million for
the year ended December 31, 2023, primarily due to $2.9 million of
stock based compensation.
- Other income for the year ended
December 31, 2023 was $23 million, primarily due to gain from
change in warrant liability and earnout liability of $23 million.
The Company expects other income and expense to be volatile based
on its share price at the end of each quarter.
- Net income was $16.4 million and
reflected other income of $23 million as discussed above.
- Net cash used in operating
activities increased to $3.3 million in the year ended December 31,
2023, primarily due to operating losses and increased costs and
activities incurred as part of the process to become a public
company.
- Cash and cash equivalents was $3.1
million as at December 31, 2023.
- As of December 31, 2023, there were
a total of 22,812,048 shares of the Company’s common stock issued
and outstanding.
2023 Initiatives
Accomplished:
- Next generation release of our
Outpost AI edge appliance utilizing Nvidia Jetson Orin module.
- Multiple new Airship AI trained AI
models released supporting advanced AI processing at the edge.
- Transition to new cloud business
management suite for all our customer relationship management
(“CRM”), enterprise resource planning (“ERP”), and accounting
processes.
- New product launch of turn-key
solutions for government customers leveraging Outpost AI.
- Federal government agency expansion
from on-premises to the FedRAMP Cloud environment.
- New customer acquisition with
several U.S. federal government agencies.
- New customer acquisition with
several major state and local law enforcement agencies.
- Improved delivery and gross margin
with transition of hardware product line to new supplier.
2024 Outlook
- Triple-digit revenue growth and
positive cash flow in 2024, supported by orders from the DHS and
DOJ, orders received late in the second half of 2023, and a strong
2024 pipeline filled with mature opportunities.
- Leverage position as a new public
company to make tactical and strategic investments across our sales
and business development organizations through organic cash flow
from business operations and the cash exercise of public
warrants.
- Targeted focus on brand awareness
and engagement in new verticals via targeted marketing outreach
opportunities, social media platforms, Airship AI hosted technology
events, and industry tradeshow events.
- Release new Outpost AI product
offerings as well as expand custom trained AI models supporting
emerging edge analytic workflows.
- Continue innovation across our core
Acropolis software platform supporting new workflows for
cloud-based deployments in highly secure operational
environments.
- Develop and execute expansionary
opportunities in the commercial and retail markets, especially
around those companies involved in fighting organized retail crime
(“ORC”).
- Improve sourcing, supply chain
management and production-based process efficiencies to help drive
the continued margin expansion.
Management Commentary
“The fourth quarter of 2023 was highlighted by
our Nasdaq listing in late December,” said Paul Allen, President of
Airship AI. “This transition from a private to public company is
expected to provide the financial transparency that many of our
customers are looking for relative to the health of our business,
as well as provide opportunities for growth outside of our
traditional organically funded operations.
“Our robust enterprise and edge AI platform is
well positioned to meet the surging demand for artificial
intelligence-based solutions supporting real-time intelligence
requirements in the homeland security and law enforcement space.
Our efforts over the last several years have positioned us to be
where we need to be for the customers who need it most.
“In the government and law enforcement space, we
are excited about several pilot opportunities we implemented with
large federal agencies in late 2023, many of which we are already
seeing rapid progression around, including the transition of
operations from on-premises to the FedRAMP cloud and the push of
significant workflow to the edge, leveraging our edge AI appliance
Outpost AI.
“These capabilities on their own are just part
of the solution to the challenges many of our customers are facing.
The ability to support operations across a customer’s entire
eco-system and leveraging artificial intelligence from the edge to
the cloud is our competitive differentiation. Combined with our
sensor agnostic approach to integrations and simplified deployment
model, agencies can realize substantial cost savings in addition to
increased operational efficiency when transitioning to Airship
AI.
“While the focus over the last several years has
been integrating sensors and solutions and leveraging artificial
intelligence to fuse the collective data in real-time, our
commercial business remains robust, with an increasing number of
nexus opportunities for solutions in the commercial marketplace
that can leverage these tailored integrations and workflow designed
for law enforcement.
“Specifically, customer opportunities are
rapidly expanding due to growing private-public partnerships
between law enforcement and commercial entities, namely around ORC
and loss prevention challenges. These problems require partnerships
at every level to be successful. Airship AI is that partner.
“In a world that is rapidly changing with new
threats emerging daily, these collective efforts uniquely position
Airship AI to solve challenges others cannot solve, at a speed
others cannot match. Whether it is a retailer struggling with theft
and shrinkage, a Fortune 500 enterprise focused on employee safety
in the workplace, or a federal agency tasked with stopping illegal
human trafficking across borders, Airship AI is ready to help
tackle these challenges.
“We look forward to providing updates in the
months to come, including those attending our Institutional
Investor Day, by invitation, in Montana on April 26th,” concluded
Mr. Allen.
About Airship AI Holdings,
Inc.
Founded in 2006, Airship AI (NASDAQ: AISP) is a
U.S. owned and operated technology company headquartered in
Redmond, Washington. Airship AI is an AI-driven video, sensor and
data management surveillance platform that improves public safety
and operational efficiency for public sector and commercial
customers by providing predictive analysis of events before they
occur and meaningful intelligence to decision makers. Airship AI’s
product suite includes Outpost AI edge hardware and software
offerings, Acropolis enterprise management software stack, and
Command family of visualization tools.
For more information,
visit https://airship.ai.
Forward-Looking Statements
The disclosure herein includes certain
statements that are not historical facts but are forward-looking
statements for purposes of the safe harbor provisions under the
United States Private Securities Litigation Reform Act of 1995.
Forward-looking statements generally are accompanied by words such
as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,”
“intend,” “expect,” “should,” “would,” “plan,” “project,”
“forecast,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters,
but the absence of these words does not mean that a statement is
not forward looking. These forward-looking statements include, but
are not limited to, (1) statements regarding estimates and
forecasts of other financial, performance and operational metrics
and projections of market opportunity; (2) changes in the market
for Airship AI’s services and technology, expansion plans and
opportunities; (3) Airship AI’s unit economics; (4) the projected
technological developments of Airship AI; (5) current and future
potential commercial and customer relationships; (6) the ability to
operate efficiently at scale; (7) anticipated investments in
capital resources and research and development, and the effect of
these investments; (8) the ability of the Company to issue equity
or equity-linked securities in the future; and (9) the inability to
maintain the listing of the Company’s common stock and warrants on
Nasdaq. These statements are based on various assumptions, whether
or not identified in this press release, and on the current
expectations of Airship AI’s management and are not predictions of
actual performance. These forward-looking statements are also
subject to a number of risks and uncertainties, as set forth in the
section entitled “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in the Registration Statement on Form
S-4, filed with the SEC on September 11, 2023, as amended from time
to time, and the other documents that the Company has filed, or
will file, with the SEC, including its Annual Report on Form 10-K
for the year ended December 31, 2023. If any of these risks
materialize or our assumptions prove incorrect, actual results
could differ materially from the results implied by these
forward-looking statements. In addition, forward looking statements
reflect the Company’s expectations, plans or forecasts of future
events and views as of the date of this press release. The Company
anticipates that subsequent events and developments will cause its
assessments to change. However, while it may elect to update these
forward-looking statements at some point in the future, the Company
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing the Company’s assessments as of any date subsequent to
the date of this press release. Accordingly, undue reliance should
not be placed upon the forward-looking statements.
Investor Contact:
Chris Tyson/Larry HolubMZ North
America949-491-8235AISP@mzgroup.us
AIRSHIP AI HOLDINGS, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
As of December 31, 2023 and December 31, 2022 |
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,124,413 |
|
|
$ |
298,614 |
|
Accounts receivable, net of provision for credit losses of $0 |
|
|
1,648,904 |
|
|
|
705,752 |
|
Prepaid expenses and other |
|
|
913,030 |
|
|
|
16,039 |
|
Payroll and income tax receivable |
|
|
7,230 |
|
|
|
967,613 |
|
Total current assets |
|
|
5,693,577 |
|
|
|
1,988,018 |
|
|
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET |
|
|
1,861 |
|
|
|
16,740 |
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS |
|
|
|
|
|
|
|
|
Advances to founders |
|
|
- |
|
|
|
1,100,000 |
|
Other assets |
|
|
182,333 |
|
|
|
- |
|
Operating lease right of use asset |
|
|
1,104,804 |
|
|
|
804,338 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
6,982,575 |
|
|
$ |
3,909,096 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
Accounts payable - trade |
|
$ |
2,908,472 |
|
|
$ |
216,718 |
|
Advances from founders |
|
|
1,750,000 |
|
|
|
600,000 |
|
Accrued expenses |
|
|
200,531 |
|
|
|
120,662 |
|
Current portion of Small Business Loan |
|
|
- |
|
|
|
292,932 |
|
Senior Secured Convertible Promissory Notes |
|
|
2,825,366 |
|
|
|
- |
|
Current portion of operating lease liability |
|
|
174,876 |
|
|
|
628,371 |
|
Deferred revenue- current portion |
|
|
4,008,654 |
|
|
|
4,168,016 |
|
Total current liabilities |
|
|
11,867,899 |
|
|
|
6,026,699 |
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Payable to founders |
|
|
- |
|
|
|
1,100,000 |
|
Small Business Loan- non-current |
|
|
- |
|
|
|
131,608 |
|
Operating lease liability, net of current portion |
|
|
943,702 |
|
|
|
203,769 |
|
Warrant liability |
|
|
667,985 |
|
|
|
- |
|
Earnout liability |
|
|
5,133,428 |
|
|
|
- |
|
Deferred revenue- non-current |
|
|
4,962,126 |
|
|
|
4,805,431 |
|
Total liabilities |
|
|
23,575,140 |
|
|
|
12,267,507 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES (Note 11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' DEFICIT: |
|
|
|
|
|
|
|
|
Preferred stock - no par value, 5,000,000 shares authorized, 0
shares issued and outstanding as of December 31, 2023 and 2022 |
|
|
- |
|
|
|
- |
|
Common stock - $0.0001 par value, 200,000,000 shares authorized,
22,812,048 and 13,387,344 shares issued and outstanding as of
December 31, 2023 and 2022 |
|
|
2,281 |
|
|
|
1,339 |
|
Additional paid in capital |
|
|
- |
|
|
|
1,964,669 |
|
Accumulated deficit |
|
|
(16,582,038 |
) |
|
|
(10,314,313 |
) |
Accumulated other comprehensive loss |
|
|
(12,808 |
) |
|
|
(10,106 |
) |
Total stockholders' deficit |
|
|
(16,592,565 |
) |
|
|
(8,358,411 |
) |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
$ |
6,982,575 |
|
|
$ |
3,909,096 |
|
|
|
|
|
|
|
|
|
|
AIRSHIP AI HOLDINGS, INC. |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND
COMPREHENSIVE LOSS |
For the years ended December 31, 2023 and
2022 |
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
NET
REVENUES: |
|
|
|
|
|
|
Product |
|
$ |
7,439,045 |
|
|
$ |
9,376,465 |
|
Post contract support |
|
|
4,692,487 |
|
|
|
5,008,328 |
|
Other services |
|
|
168,052 |
|
|
|
164,348 |
|
|
|
|
12,299,584 |
|
|
|
14,549,141 |
|
COST OF
NET REVENUES: |
|
|
|
|
|
|
|
|
Product |
|
|
4,767,159 |
|
|
|
4,554,340 |
|
Post contract support |
|
|
1,681,267 |
|
|
|
1,494,583 |
|
Other services |
|
|
86,841 |
|
|
|
79,205 |
|
|
|
|
6,535,267 |
|
|
|
6,128,128 |
|
GROSS
PROFIT |
|
|
5,764,317 |
|
|
|
8,421,013 |
|
RESEARCH
AND DEVELOPMENT EXPENSES |
|
|
2,729,492 |
|
|
|
3,614,814 |
|
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES |
|
|
9,675,190 |
|
|
|
7,630,012 |
|
TOTAL
OPERATING EXPENSES |
|
|
12,404,682 |
|
|
|
11,244,826 |
|
OPERATING LOSS |
|
|
(6,640,365 |
) |
|
|
(2,823,813 |
) |
OTHER
INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
Gain from change in fair value of warrants |
|
|
1,341,120 |
|
|
|
- |
|
Gain from change in fair value of earnout liability |
|
|
21,976,349 |
|
|
|
- |
|
Loss from change in fair value of convertible debt |
|
|
(240,784 |
) |
|
|
- |
|
Interest income |
|
|
- |
|
|
|
42,565 |
|
Interest expense |
|
|
(55,685 |
) |
|
|
(75,256 |
) |
Other expense |
|
|
9,501 |
) |
|
|
- |
|
Other income- PPP loan forgiveness |
|
|
- |
|
|
|
1,146,235 |
|
Other income- employee retention tax credit |
|
|
- |
|
|
|
1,232,776 |
|
Total other income, net |
|
|
23,011,499 |
|
|
|
2,346,320 |
|
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) BEFORE PROVISON FOR INCOME TAXES |
|
|
16,371,134 |
|
|
|
(477,493 |
) |
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
- |
|
|
|
(10,000 |
) |
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS) |
|
|
16,371,134 |
|
|
|
(487,493 |
) |
|
|
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE LOSS |
|
|
|
|
|
|
|
|
Foreign currency translation loss, net |
|
|
(2,702 |
) |
|
|
(10,106 |
) |
|
|
|
|
|
|
|
|
|
TOTAL
COMPREHENSIVE INCOME (LOSS) |
|
$ |
16,368,432 |
|
|
$ |
(497,599 |
) |
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS) PER SHARE: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.20 |
|
|
$ |
(0.04 |
) |
Diluted |
|
$ |
0.80 |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
Weighted
average shares of common stock outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
13,671,376 |
|
|
|
13,387,344 |
|
Diluted |
|
|
20,390,663 |
|
|
|
13,387,344 |
|
|
|
|
|
|
|
|
|
|
AIRSHIP AI HOLDINGS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
For the years ended December 31, 2023 and
2022 |
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
Year Ended |
|
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
16,371,134 |
|
|
$ |
(487,493 |
) |
Adjustments to reconcile net income (loss) to net cash used
in operating activities |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
14,879 |
|
|
|
14,879 |
|
Stock-based compensation- stock option grants |
|
|
715,727 |
|
|
|
546,460 |
|
Stock-based compensation- warrants |
|
|
2,136,115 |
|
|
|
- |
|
Gain on forgiveness of note payable - PPP |
|
|
- |
|
|
|
(1,146,235 |
) |
Amortization of operating lease right of use asset |
|
|
596,556 |
|
|
|
517,232 |
|
Accelerated amortization of ROU asset - lease termination |
|
|
265,130 |
|
|
|
- |
|
Gain from lease liability termination |
|
|
(344,093 |
) |
|
|
- |
|
Gain from change in fair value of warrant liability |
|
|
(1,341,120 |
) |
|
|
- |
|
Gain from change in fair value of earnout liability |
|
|
(21,976,349 |
) |
|
|
- |
|
Loss from change in fair value of convertible note |
|
|
240,784 |
|
|
|
|
|
Non cash interest, net |
|
|
65,487 |
|
|
|
17,181 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(943,152 |
) |
|
|
125,601 |
|
Prepaid expenses and other |
|
|
(2,329 |
) |
|
|
14,063 |
|
Other assets |
|
|
(182,333 |
) |
|
|
- |
|
Operating lease liability |
|
|
(531,621 |
) |
|
|
(560,435 |
) |
Payroll and income tax receivable |
|
|
960,383 |
|
|
|
(939,850 |
) |
Accounts payable - trade and accrued expenses |
|
|
666,136 |
|
|
|
(88,784 |
) |
Deferred revenue |
|
|
(2,667 |
) |
|
|
(915,278 |
) |
NET CASH
USED IN OPERATING ACTIVITIES |
|
|
(3,291,333 |
) |
|
|
(2,902,659 |
) |
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from convertible promissory note |
|
|
2,584,582 |
|
|
|
- |
|
Advances from founders, net |
|
|
1,150,000 |
|
|
|
600,000 |
|
Proceeds from reverse recapitalization |
|
|
2,809,792 |
|
|
|
- |
|
Proceeds from small business loan and line of credit |
|
|
- |
|
|
|
565,050 |
|
Proceeds from notes receivable - related parties |
|
|
- |
|
|
|
841,917 |
|
Repayment of small business loan and line of credit |
|
|
(424,540 |
) |
|
|
(140,510 |
) |
|
|
|
|
|
|
|
|
|
NET CASH
PROVIDED BY FINANCING ACTIVITIES |
|
|
6,119,834 |
|
|
|
1,866,457 |
|
|
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
2,828,501 |
|
|
|
(1,036,202 |
) |
|
|
|
|
|
|
|
|
|
Effect from exchange rate on cash |
|
|
(2,702 |
) |
|
|
(10,106 |
) |
|
|
|
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS, beginning of year |
|
|
298,614 |
|
|
|
1,344,922 |
|
|
|
|
|
|
|
|
|
|
CASH AND
CASH EQUIVALENTS, end of year |
|
$ |
3,124,413 |
|
|
$ |
298,614 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
21,438 |
|
|
$ |
19,950 |
|
Taxes paid |
|
$ |
17,247 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Noncash
investing and financing |
|
|
|
|
|
|
|
|
Elimination of advances to founders in connection with contribution
of Zeppelin by shareholders |
|
$ |
1,100,000 |
|
|
$ |
- |
|
Elimination of payables to founders in connection with contribution
of Zeppelin by shareholders |
|
$ |
1,100,000 |
|
|
$ |
- |
|
Warrants issued in connection with debt |
|
$ |
15,418 |
|
|
$ |
- |
|
Recognition of right-of-use asset |
|
$ |
1,162,152 |
|
|
$ |
1,321,570 |
|
Recognition of operating lease liability |
|
$ |
1,162,152 |
|
|
$ |
1,392,575 |
|
Deferred rent write off |
|
$ |
- |
|
|
$ |
71,005 |
|
Noncash activity related to Merger |
|
|
|
|
|
|
|
|
Recognition of warrant liability |
|
$ |
2,009,105 |
|
|
$ |
- |
|
Recognition of earnout liability |
|
$ |
27,109,777 |
|
|
$ |
- |
|
Recognition of prepaid assets |
|
$ |
894,662 |
|
|
$ |
- |
|
Recognition of accounts payable |
|
$ |
1,500,000 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
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