Q&A

Frequently Asked Questions

09 september 2020

09 June 2020

29 August 2019

Questions and answers

09 september 2020

1.

Q:

As a long-term shareholder, I want to know why during the current pandemic and pressure on the share price, the founder of Clyde Space sells 1 million shares at a great discount, leading to one of the major shareholders pumping out millions of shares on the open market? On top of this, you choose in your latest presentation to state that the company is considering different financing alternatives. What is your explanation for the company's actions to your long-term investors?

A:

Our focus continues to be to manage the company well and grow it for the future. The actions we have taken over the last few months are driven by a desire to give the company a good, stable basis to grow and to strengthen our prospects. Although I understand the anxiety that large sales of shares can create, the founder of Clyde Space is still a major shareholder in the company, owning more than 7 million shares, and he is a very active member of the management team. 

2.

Q:

Why have you guys not tell the market that you where on the otc market already in 2018?

A:

We joined the OTC market in August 2020. There had nevertheless been transactions before that between brokers that appear in the history of transactions, but those were unofficial. It was also a surprise for us that they appeared on the list.

3.

Q:

Are you ready today to take on a constellation order? Or will you be ready when your new facility opens in Uppsala?

A:

Yes. We can scale up our production to meet the needs of a constellation.

4.

Q:

Is it possible for you to submit a schedule of planned launches of AAC Clyde Space Satellites?

A:

We do not publish our launch schedule as that information is usually commercially sensitive to our customers.

5.

Q:

The bluestone project at space metric how does that going?

A:

We ended the demonstration phase in 2018 and the project was handed over to Spacemetric after that

6.

Q:

How will you continue to increase the visibility for the company in the US?

A:

We are already interacting with US investors, and we have prepared an extensive campaign to show off the company in the US over the next few months.

7.

Q:

What options of finance are you looking at?

A:

The board is considering various alternatives.

8.

Q:

Hi! How are your relationships with your "bigger" investors at the moment due to not so understandable beating of your share price. Many included myself are worried that "bigger" investors are leaving the ship...?

A:

We work hard to increase the value of our company and do not comment on our shareholder’s ownership.

9.

Q:

How has your partnership with Ball evolved?

A:

We do not have any common projects at the moment.

10.

Q:

How many employees do AAC Clyde Space have now?

A:

At the end of Q2 we had 97 employees.

11.

Q:

AAC Clyde Space and York Space Systems have signed an agreement for the delivery of advanced command and data management electronics to York's platform. Devices from your Sirius product platform will be integrated across York's 20+ platforms currently undergoing formal "intentions" (LOIs). 1. How are these LOIs doing? 2. How does the royalty part of the agreement work between AAC and York?

A:

We will receive a royalty when and if York uses AAC Clyde Space's equipment in their satellites.

12.

Q:

Regarding the new type of partnerships as recently seen with Saab and Ordcomm. Will ACS maintain equity ownership in these kinds of partnerships in the long term?

A:

That will depend on the nature of the deal and of the partnership.

13.

Q:

With the opening of your new facility will you be able to ramp up production even further?

A:

Yes, we will build a complete assembly cube satellite assembly line.

14.

Q:

How big capacity will Uppsala facility have regarding satellite production? The EPIC 3U satellite is planned to launch in mid-2022 and will be the first satellite assembled at AAC Clyde Spaces new integration facility in Uppsala. Where is your new facility in Uppsala?

A:

The new assembly facility will be at our current premises in Uppsala

15.

Q:

When do you expect NLS to order the other 79 satellites?

A:

I presume you meant NSL. That would be a question best directed at them. Currently we are building a second satellite for them.

16.

Q:

Why is that you are in mkc market in Germany and London also but haven’t told the stock owners?

A:

We are not on the German or London markets. It might be that there have been transactions between brokers that you have found. Same thing has happened on the US OTC market before we started to be officially traded.

17.

Q:

Why do we not have a permanent US CEO? Is that not the market you would like to have high focus on?

A:

We are currently reviewing our US operation and our medium-term plan is to have a much bigger presence in the US. Joining the OTC market is part of our strategy to increase that presence

18.

Q:

Have you applied for IPP funding for some of your projects?

A:

Firesat was built under an IPP project.

19.

Q:

The latest news on the colab with saab and orbcom was really great news! And so was the the listing on otc, very exciting! How come we don't see any trades on the otc list.

A:

We are still a bit unknown in the US. We are presenting AAC Clyde Space for different stakeholders and have a plan to make ourselves for visible to the US market.

20.

Q:

What kind of manufacturing capacity for cubesats are you achieving now at Uppsala? In the near future, do you plan to work on other satellites in Uppsala, in addition to the Saab/orbcomm project?

A:

First step is to have an assembly capacity of 2 satellites. We will use the Uppsala facility to increase our overall capacity.

21.

Q:

4 years soon on the stock market and still not making a profit. When can we expect that to happen?

A:

We stated, in the 2019-Q4 report, that we were aiming to be EBITDA positive in 2021. However, as stated in the 2020-Q2 report, the pandemic has proved this to be difficult to achieve.

22.

Q:

How has the competitive landscape developed for aac clyde space during the past years? Do you see increased competition?

A:

Competition in the sector has increased but opportunities have increases even more as small satellites become more the solution of choice for many users. The increased competition is the mark of a rapidly expanding market.

23.

Q:

Are you still looking for a company to merge with in USA?

A:

We are continuously evaluating different options, acquisitions and/or setting up our own manufacturing facility.

24.

Q:

Will the collaboration with York continue as before?

A:

Yes, there is no change

25.

Q:

What can you say about your progress in the US except the otc listing?

A:

Major part of the orders we have press release this year are from the US, so it is an important market for us

26.

Q:

How fast can you build a satellite today. Last time I read it said about 5 days. Is it because of the modular platforms?

A:

Ultimately the driver for the time it takes to build a satellite is how much non-recurring engineering is required. If none is required, and all the parts are ready, five days for build would be possible, as the system is very modular.

27.

Q:

What does it mean for your business opening your new facility in Uppsala in October?

A:

It is gives us extra capacity and we will have the capacity to build satellites in different locations what sometimes is advantageous.

28.

Q:

Could you talk about the advantages and challenges of the new type of equity partnerships as seen recently with Saab and Orbcomm?

A:

The consortium with Saab and Orbcomm is not an equity partnership. The three parties share a project and this opens the door for future joint projects, which might have a different format.

29.

Q:

During 2018 you had several orders with expected follow up orders, did you receive any of these? The Ukraine company for example?

A:

So far this year, we have had follow on order from NSLCom, Intuitive Machines, Orbital Micro Systems, Loft Orbital and from two Japanese customers.

30.

Q:

What are your estimates regarding the next 2-5 years where do you think the company will be around 2025?

A:

Sorry, we don't do forecasts.

31.

Q:

Does the future still look bright for small sat industry or has the corona virus make those forecast look darker?

A:

We see the COVID-19 pandemic as a temporary difficulty, rather than a permanent feature. It has affected the economy and depressed markets, but the fundamentals of the small satellite industry remain strong.

32.

Q:

Can you comment on Craigs sale of shares?

A:

We cannot comment on the actions of any of our shareholders. This said, Craig still holds more than 7million shares in the company.

33.

Q:

You don’t inform your shareholders much what’s going on in the company (IR). is this something you might improve? As you know the stock price is very low and it is probably one of the reasons.

A:

We do quarterly updates, press release relevant events/contracts and regularly do presentations to investors. For the fall we have a whole string of activities planned already. We are also continuing our efforts to interest both Swedish, US and other international investors in the share.

34.

Q:

In which phase of the projects you usually get paid? By delivery or milestones?

A:

We usually get paid by milestone.

35.

Q:

Can you give more details on which projects have been delayed due to covid-19?

A:

We don’t comment how individual projects progresses.

36.

Q:

How much do you need to invest in the SAAB, Orbcomm partnership both short term and long term?

A:

We will receive 17.0 MSEK in total, of which 12.2 MSEK is in the form of a grant from the Swedish Transport Administration, to finance the building, launch and commissioning of the first satellite in the project.

37.

Q:

How big capacity will Uppsala facility be regarding satellite production?

A:

The Uppsala facility for now is being sized to produce two satellites per year. But we have space to significantly increase that rate if required.

38.

Q:

What type of company is most interesting to acquire?

A:

We are looking for companies that enhance our technical capability, product lineup and/or geographical reach.

39.

Q:

How many satellites can you produce per year in Glasgow?

A:

Currently our capacity is for 8-10 satellites requiring non-recurring engineering. But for pure recurring builds, we could produce in the 10s, probably up to 100 per year.

40.

Q:

Why didn’t Kepler continue with AAC satellites for their constellation?

A:

Kepler’s strategy is to build their own satellites.

41.

Q:

The total value of the small satellite market is estimated at 42 billion between 2019-2028. you want to take a big piece of it, can you be more specific? how many %?

A:

AAC Clyde Space aims to be the world leader in commercial small satellites.

42.

Q:

Do you have problems with getting New resources to Glasgow?

A:

No. Of course, with COVID-19 there have been restrictions, but remote working is working very well for us.

43.

Q:

The sat you currently are building for NSL, is that NSL-sat2, 1 of 80, that can be a intended commercial constellation?

A:

We are indeed building NSLSat-2 for NSLComm. Regarding their future plans, I would urge you to contact them.

44.

Q:

Do you still see AAC as the leading company in the smallsat sector?

A:

My ambition is to make AAC Clyde Space THE leading company in the sector. Currently I would say we are one of the leading companies.

45.

Q:

Can you tell us which countries you are doing project for now?

A:

Our main markets are US, Europe and Asia.

46.

Q:

How many companies around the world are struggling with pandemic. What do you say to us investors here tonight and the ones for example in the US why this company is a good investment at this time?

A:

We offer a rare blend of experience, technical ability and commercial mindset in the sector. We have been building and operating successful space hardware for 15 years. And we also have the appetite, the talent and the capability to grow our business by exploring new ways of doing business. Despite the pandemic, the small satellite business is the future of space and it is a growing sector. We believe we particularly well placed to take advantage of that growth.

47.

Q:

Luis have a interesting background as a CEO of a bigger satellite company. Could this be any advantage for AAC on the US market?

A:

I held a diversity of senior roles in my previous company (but not CEO) and I do believe that has prepared me well to understand the small satellite market in general.

48.

Q:

How bigger capacity does Glasgow have compared to Uppsala facility regarding satellite production?

A:

In Glasgow we can produce 8-10 satellites/year, but we are growing that capacity to 20 satellites/year. In Uppsala we are starting with a maximum capacity of 2 satellites/year but could scale that five or ten fold if the demand exists. 

49.

Q:

In which milestones are you getting paid and How is the percentage of the total payment divided between them?

A:

It is different from project to project. We always aim to be cash flow positive through the project

50.

Q:

Who is your dream Customer and Investor?

A:

Someone that shares our vision of providing cost effective, cutting edge space solutions that are changing the economics of space services.

51.

Q:

When do you think the stock price will rise to decent levels?

A:

It is the stock market’s job to value the share. What management can do is run the business as well as we can and also communicate well with current and potential shareholders. We are growing and developing our offering, partnering with companies like Saab and Orbcomm and are also stepping up our investor relations efforts. I believe that should create value for shareholders.

09 June 2020

52.

Q:

Can you elaborate on the work that has been done on M&A? How would you describe your progress in this area?

A:

It is an ongoing process and we move ahead when we find an opportunity that will benefit our business. To add to that, we have been looking at possible acquisitions and joint ventures over the last year, but we will only move when it makes sense for the company.

53.

Q:

Regarding Kepler - Is this a closed chapter on your part, or will you deliver parts in any way?

A:

Kepler has chosen its strategy for the future and we remain open to support them when and if they so wish. In the meantime, we are looking forward to the launch of Kepler TARS and it will be good to once again work with our colleagues from Kepler.

54.

Q:

Is there any news on the change of marketplace, from First North to OMX Small cap?

A:

We have done a readiness assessment by an external consultant with a list of actions as a result. The actions will be implemented over time. The ambition to transfer the listing to the main market remains.

55.

Q:

Can you give an overview outlook on how the second quarter is looking so far. I know you cannot tell in number and specific. But more generally, are you affected by the corona virous, or is business and projects progressing as expected despite the turbulence?

A:

The impact on our business performance has thankfully been rather limited to date. Manufacturing is up and running, business development have managed to stay active despite cancellation of trade fairs and are replenishing our prospect pipeline at good pace. We have press released several contract wins since March, so I would say we are doing ok.

56.

Q:

You had said in May that you had seen not much slowdown from Covid-19. A month later, is that still the case in terms of 2020 expected results?

A:

The impact on our business performance has been limited to date. Looking forward, manufacturing is up and running, business development have managed to continue to engage with customers and we continue to see a good pipeline of opportunities.

57.

Q:

Have you had any indication if the shares still owned by Fouriertransform will be gradually sold on the stock market or if the intent is to find a new institutional owner as they are set for ending their ownership?

A:

We can't comment on Fouriertransform's plans.

58.

Q:

Could you please comment on current business activity? Offer request ect?

A:

The pandemic has led to the cancellation of many trade shows and changes in the way we interact with customers, but we have moved our business development activities on-line and we have seen very positive results from those. Our pipeline remains strong and we have not seen a reduction in interest in our products.

59.

Q:

A question specifically for the CEO. Can you please comment why your commitment regarding ownership is so absent? It sends bad signals on the market.

A:

Although this is frustrating to myself, I buy when the time is right, and I am allowed to do so.

60.

Q:

Someone or some are selling large number of shares from UBS account(s), resulting in a downwards pressure on the stock price. Do you have any comments on this?

A:

We don't comment on shareholders trading.

61.

Q:

Has your collaboration with Ball lead to something and/or is this still an ongoing process?

A:

A Memorandum of Understanding was entered in 2018 with Ball to conduct open-ended discussions on various topics. Nothing has materialised as of today.

62.

Q:

AAC Clyde Space has grown significantly, but in common with other CubeSats manufacturers has revenue that would be a rounding error in conventional satellite manufacturers' accounts. How can CubeSat manufacturers transition to the mainstream?

A:

We want and expect to grow our business strongly, but we do not want to be 'conventional' satellite manufacturers. Our value is in innovating faster and being more agile and creative then the 'conventional' manufacturers. We see our market growing strongly and we will grow with it by being technically strong and commercially aggressive.

63.

Q:

Why is are you noted in the us market otc list under aacmf Nasdaq otc foreign? Can find you also in Frankfurt mic list?

A:

AAC Clyde Space is only listed at Nasdaq First North Premier Growth Market.

64.

Q:

Is it of practical reasons (estrange) that the company start to build in Uppsala as well. Or is it that the company wants to scale up the production?

A:

We are planning to increase our capacity.

65.

Q:

Are there any big contracts you are competing for right now that is not yet won but that you can comment on?

A:

I'm afraid we cannot comment on any on-going business.

66.

Q:

What impact will the GBP 2.3M grant from Scottish Enterprise have on your production capacity in the future (ie number of satellites per month) and your overall competitiveness? Will it increase your chances to win contracts already this year or first in a couple of years?

A:

The introduction of the Platform Functional Unit (PFU) will change dramatically our approach to satellite design and manufacture. As a standard, very flexible unit, we can reconfigure designs without needing to change the core of the hardware. That will improve our competitiveness in both cost and schedule. My expectation is that the main impact will be seen next year and the years after.

67.

Q:

Several of the smaller shareholders keep seeing the value of the share being pushed down by massive dumps following almost all major positive news. One or more major owners are dumping shares, keeping the value down. Is this not a risk for becoming an acquisition target at a very low valuation? Have you considered meeting with these larger shareholders and make a deal outside the public market so that the share value is not so adversely affected?

A:

We aim to diversify our shareholder base. It is a long-term effort, where we expect to see gradual results. These efforts have high priority.

29 August 2019

68.

Q:

Why does it take time to get orders?

A:

The underlying trend for us as well as for the industry is clear, there is a strong demand for data and services from space that is fueling good growth. However, the sales process is long, what is common in not yet fully developed growth industries. We have a healthy and growing pipeline with potential customers.

69.

Q:

When do you expect to get orders for constellations?

A:

We have for some time delivered satellites to customers who intend to create larger constellations. We expect several of these customers to return with larger orders in the long run, but it is up to them to decide when it is time to take this step.

70.

Q:

What funding opportunities do those who want to send up constellations into space have?

A:

The customers are very different, and therefore have different opportunities. There is everything from established and well-funded commercial companies to startups that need funding before they can move on. Our view is that it is possible to finance a good business plan on reasonable terms.

71.

Q:

What is your main challenge right now?

A:

Our main focus is on scaling up the production. We are actively working on this and have recently strengthened the logistics function, quality assurance and delivery capacity.

72.

Q:

What are the plans for expansion?

A:

We are focused on growing both organically and through acquisitions to fortify our leading position within small satellites.

73.

Q:

You have said that you are looking for acquisitions. Why does it take such time?

A:

We are actively looking for suitable acquisition candidates and have evaluated several opportunities. For us, it is important to find a partner that really suits us, with our focus on the small satellite sector.

74.

Q:

Is there a special market that is particularly interesting for acquisitions?

A:

We have said that we would like to establish more clearly in the US, which could be done through acquisitions. The United States is the world’s largest space market, so it is natural for us to have a proper establishment there.

75.

Q:

What is your view on the increasing competition in the market where both China and the US are investing billions in small satellite development?

A:

This shows the strong interest in small satellites and will help to increase growth. AAC Clyde Space competes very well in today’s market and has a stronger “flight heritage” than most others. We will use this to maintain a very strong position. Our goal is to be leading in the market.

76.

Q:

Do you think China can take over the market through very low prices? If not, why?

A:

Customers weigh a variety of factors when choosing partners in space, and do not solely focus on price. These factors include reliability, performance, flight heritage and, not least, data security. If you can deliver strongly on these factors and also offer a good price, you are standing on good ground.

77.

Q:

Security seems to be increasingly important and there are many articles about satellites being easy to hack. Have any of your satellites been hacked? What does your security look like and what is the plan going forward?

A:

Most satellites, AAC Clyde Space included, have unique features in their design, which means that very specific knowledge about each satellite is needed to be able to access it. Such knowledge is not publicly available and only authorized people have access to it. This leads to the level of security today being judged to be satisfactory. At the same time, we are preparing for the stricter security requirements that come with larger constellations and an increased degree of standardization.

78.

Q:

Are cube satellites really the way forward?

A:

Cube satellites will play a significant role in the small satellite market for several years to come. Through these, a technological development and standardization takes place which helps to reduce costs and thereby create a commercial market based on data from space.

79.

Q:

How are ongoing projects developing?

A:

We share information when we win bigger projects, deliver ready-made satellites and most often when they are launched into orbit. In the interim reports we also share information on how the business is developing on an overall level and comment on any deviations. However, we do not normally comment on how individual projects develop on an ongoing basis, neither in interim reports or elsewhere.

IR Contact

Mats Thideman CFO and Deputy CEO
+46 70-556 09 73 mats.thideman@aac-clydespace.com

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