The seco d qua te of 2026 ma ked a othe impo ta t pe iod of p og ess fo Dy amic Ae ospace Systems as we co ti ued to adva ce ou tech ology platfo ms, expa di g st ategic elatio ships a d positio i g the Compa y fo futu e g owth.
O Ap il 30 we disclosed ou D o e Days Demo fo the A izo a Depa tme t of Public Safety. I May we e able to atte d the Xpo e tial Expo i Det oit with U usual Machi es a d we e able to demo st ate ou Mitigato class of d o es. That was followed by hosti g a high-level Japa ese delegatio at ou Michiga facilities that i cluded Mitsubishi Heavy I dust ies, Kawasaki Heavy I dust ies, Suba u, NEC, IHI, a d othe Japa ese defe se leade s afte the DPS D o e Expo. The visit p ovided a oppo tu ity to demo st ate ou tech ology platfo ms, discuss pote tial applicatio s, a d begi explo i g futu e collabo atio oppo tu ities withi the Japa ese ma ket. We have subseque tly bee i vited to co ti ue those discussio s a d demos i Japa a d ma ageme t is evaluati g pa ticipatio as schedules a d st ategic p io ities pe mit.
I collabo atio with the A izo a Depa tme t of Public Safety, we hosted a multi-age cy D o e Demo Expo as dema d accele ates fo U.S.-ma ufactu ed UAV systems.
We delive ed B eache /Mitigato Quad a d Hex tactical d o e systems to the A izo a Depa tme t of Public Safety fo ope atio al evaluatio .
We i teg ated U usual Machi es NDAA-complia t compo e ts i to ou Mitigato /B eache tactical d o e platfo m.
We expa ded ou auto omous logistics a d UAV i tellectual-p ope ty po tfolio with th ee ew p ovisio al pate t fili gs.
Subseque t to Ju e 30, 2026, we have co ti ued to build o this mome tum, most otably:
We p ese ted at RedChip’s “Ve tical Eco omy: The Race to Domi ate the Skies” Vi tual I vesto Co fe e ce, with the co fe e ce eplays ow available.
Most ece tly, we pa t e ed with Flightbox, I c. to adva ce auto omous medical d o e logistics fo healthca e, gove me t, a d comme cial ma kets.
Ultimately, we believe success will be measu ed agai st ou ability to i ovate, execute, ge e ate sustai able eve ue a d c eate lo g-te m value fo sha eholde s. But umbe s alo e wo ‘t tell the full sto y. The oad to success is always laid dow with g it, dete mi atio , a d i ge uity. At DAS we’ve assembled a multidiscipli a y team that combi es ae ospace e gi ee i g, auto omous systems developme t, ma ufactu i g, softwa e, milita y expe ie ce, a d public-compa y leade ship. Ou leade ship a d Boa d i clude executives with backg ou ds spa i g Ho eywell Ae ospace, FedEx, a d othe leadi g o ga izatio s. We believe this depth of expe ie ce positio s us well as we co ti ue executi g ou lo g-te m st ategy.
Fo the qua te e ded Ju e 30, 2026, the compa y epo ted a GAAP et loss of $2.18 millio . While this figu e accu ately eflects equi ed accou ti g t eatme t u de U.S. GAAP sta da ds, it is impo ta t fo sha eholde s to u de sta d that a mea i gful po tio of the epo ted loss co sisted of o -cash accou ti g e t ies athe tha actual ope atio al cash expe ditu es du i g the qua te . No -cash items i cluded i the GAAP et loss a e as follows:
Less: o -cash items excluded f om Adjusted Ope atio al Loss: | Dep eciatio a d amo tizatio | $ | (86,000 | ) | Stock-based compe satio | $ | (559,000 | ) | Amo tizatio of debt discou t | $ | (223,000 | ) | Fi a ci g- elated accou ti g costs | $ | (298,000 | ) | Gai o fai value adjustme t of de ivative liabilities | $ | 105,000 | Total o -cash adjustme ts, et | $ | (1,061,000) | S-1 egist atio a d atio al excha ge up-listi g(2) | $ | (27,800 | ) | Divide by: mo ths i pe iod | 3 |
“Adjusted Ope atio al Loss”, “Adjusted Ope atio al Loss, as o malized” a d “Adjusted Ope atio al Loss, as o malized pe mo th” a e o -GAAP fi a cial measu es. The Compa y defi es Adjusted Ope atio al Loss as GAAP et loss adjusted to exclude dep eciatio a d amo tizatio , stock-based compe satio , amo tizatio of debt discou t, fi a ci g- elated accou ti g costs, a d the o -cash adjustme ts to fai value of de ivative liabilities. S-1 egist atio a d up-listi g o malizi g items elate to legal, accou ti g, a d adviso y costs i cu ed i co ectio with these disc ete capital-ma kets i itiatives, which ma ageme t believes a e sepa ately ide tifiable f om, a d ot i dicative of, the costs i cu ed i the Compa y’s co e UAV desig , ma ufactu i g, a d comme cializatio ope atio s
Ma ageme t believes Adjusted Ope atio al Loss p ovides useful i fo matio to i vesto s because it eflects the Compa y’s ope atio al cash utilizatio du i g the pe iod, exclusive of o -cash accou ti g e t ies, which ma ageme t believes is a mea i gful suppleme t to GAAP esults give the Compa y’s p e- eve ue stage a d o goi g capital-ma kets i itiatives. Ma ageme t uses Adjusted Ope atio al Loss i te ally fo i te al budgeti g a d fo ecasti g, assessi g cash eeds i co ectio with capital-ma kets a d up-listi g i itiatives.
Adjusted Ope atio al Loss is ot a measu e of fi a cial pe fo ma ce u de GAAP, should ot be co side ed i isolatio o as a substitute fo et loss o othe measu es of fi a cial pe fo ma ce p epa ed i acco da ce with GAAP, a d may ot be compa able to simila ly titled measu es used by othe compa ies.
2. Ma ageme t believes it is useful to i vesto s to ide tify costs elated to S-1 egist atio a d a atio al excha ge up-listi g sepa ately because these costs a e bei g i cu ed i co ectio with a disc ete co po ate i itiative – the Compa y’s egist atio stateme t a d pu suit of a atio al secu ities excha ge listi g – athe tha i the o di a y cou se of the Compa y’s co e ope atio s. The Compa y expects the mag itude of these costs to decli e o ce the egist atio stateme t is decla ed effective a d the up-listi g p ocess is complete, although the Compa y may co ti ue to i cu legal, accou ti g, a d complia ce costs of this ge e al atu e as a public compa y, a d the e is o assu a ce as to the timi g of completio of eithe p ocess
These accou ti g cha ges a e equi ed u de GAAP but do ot di ectly educe the compa y’s ope ati g cash positio i the same way as pay oll, ma ufactu i g, e gi ee i g, adve tisi g a d demo st atio s, t avel, o ve do payme ts. I additio , the qua te i cluded a o -cash accou ti g gai of app oximately $105,000 elated to the fai value adjustme t of de ivative liabilities. While this educed the epo ted accou ti g loss, it also did ot p ovide ope atio al cash to the compa y. Afte adjusti g fo these items, the compa y’s total et o -cash impact fo the qua te was $1.06 millio . The qua te also co ti ued to i clude legal, accou ti g, complia ce, a d elated expe ses associated p ima ily with o goi g S-1 activities, a d capital-ma kets p epa atio . Afte o malizi g these items, ma ageme t estimates the compa y’s adjusted ope atio al loss fo Q2 2026 was $1.1 millio , o oughly $364,000 pe mo th. Impo ta tly, this eflects the co ti ued scali g of ope atio s followi g the 2025 asset acquisitio s, i cludi g full-pe iod sala ies fo the expa ded team, while ma ageme t emai s focused o di ecti g spe di g towa d st ategic i itiatives, custome e gageme t, demo st atio s, i tellectual-p ope ty developme t, a d sales activities that we believe ca c eate lo g-te m sha eholde value. We believe it is impo ta t fo sha eholde s to evaluate the compa y ot o ly th ough t aditio al GAAP epo ti g met ics, but also th ough the le s of ope atio al cash utilizatio , st ategic i vestme t positio i g, i tellectual p ope ty developme t, custome e gageme t, a d lo g-te m g owth i itiatives as we co ti ue t a sitio i g Dy amic Ae ospace Systems i to a scalable ae ospace a d auto omous systems platfo m.
Du i g the seco d qua te , the compa y co ti ued adva ci g its b oade capital ma kets st ategy, i cludi g o goi g effo ts to positio Dy amic Ae ospace Systems fo a pote tial futu e uplisti g to a majo atio al excha ge such as the NYSE Ame ica .
As pa t of these i itiatives, the compa y co ti ued to i cu legal, accou ti g, complia ce, a d up-listi g elated expe ses associated with st e gthe i g its public-compa y i f ast uctu e a d p epa i g fo futu e capital-ma kets oppo tu ities. Ma ageme t co ti ues to evaluate these i itiatives as ma ket co ditio s evolve a d will p ovide additio al updates as app op iate. Ma ageme t believes these effo ts ep ese t impo ta t fou datio al steps towa d i c easi g i stitutio al visibility, imp ovi g lo g-te m ma ket accessibility, e ha ci g sha eholde awa e ess, a d positio i g the compa y fo futu e g owth a d fi a ci g oppo tu ities as the busi ess co ti ues to matu e.
I closi g, o e of this p og ess happe s without the people behi d it. I wa t to tha k ou team fo the dedicatio they’ve show this yea , ou wo ki g pa t e s at D ops Sma t Hubs, Potomac Rive G oup, U usual Machi es, Noo Fulfillme t (UAE), Flightbox a d othe s fo thei co ti ued collabo atio , a d ou sha eholde s fo the t ust a d suppo t that make this wo k possible. We emai ea ly i the Compa y’s developme t, but we believe the p og ess achieved du i g the qua te p ovides a solid fou datio fo co ti ued executio . We look fo wa d to updati g you o ou co ti ued p og ess i the qua te s to come.
Best ega ds,
Ke t Wilso CEO / Chai ma of the Boa d
I vesto Relatio s:
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This lette co tai s fo wa d-looki g stateme ts withi the mea i g of the P ivate Secu ities Litigatio Refo m Act of 1995. Fo wa d-looki g stateme ts i clude, but a e ot limited to, stateme ts ega di g the Compa y’s busi ess st ategy, p oduct developme t, custome evaluatio s, pa t e ships, i tellectual p ope ty, egulato y app ovals, a ticipated demo st atio s, capital ma kets activities, pote tial excha ge uplisti g, fi a ci g i itiatives, sales oppo tu ities, ma ket expa sio , a d futu e ope ati g pe fo ma ce. These stateme ts a e based o ma ageme t’s cu e t expectatio s, estimates, a d assumptio s a d a e subject to a umbe of k ow a d u k ow isks a d u ce tai ties that could cause actual esults to diffe mate ially f om those exp essed o implied by such stateme ts. Facto s that may cause actual esults to diffe i clude, amo g othe s, the Compa y’s ability to obtai additio al fi a ci g, execute its busi ess st ategy, secu e custome co t acts, successfully comme cialize its tech ologies, complete egulato y a d ce tificatio p ocesses, satisfy excha ge listi g equi eme ts, mai tai st ategic elatio ships, a d ge e al eco omic, i dust y, a d ma ket co ditio s. Reade s a e cautio ed ot to place u due elia ce o fo wa d-looki g stateme ts, which speak o ly as of the date of this lette . Except as equi ed by applicable law, Dy amic Ae ospace Systems u de takes o obligatio to publicly update o evise a y fo wa d-looki g stateme ts to eflect subseque t eve ts o ci cumsta ces.
